Full Text of SB1983 102nd General Assembly
SB1983eng 102ND GENERAL ASSEMBLY |
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| 1 | | AN ACT concerning revenue.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 5. The Corporate Accountability for Tax | 5 | | Expenditures Act is amended by changing Section 25 as follows:
| 6 | | (20 ILCS 715/25)
| 7 | | Sec. 25. Recapture.
| 8 | | (a) All development assistance agreements
shall contain, | 9 | | at a
minimum, the following recapture provisions:
| 10 | | (1) The recipient must (i) make the level of capital | 11 | | investment in the
economic
development project specified | 12 | | in the development assistance agreement; (ii)
create or
| 13 | | retain, or both, the requisite number of jobs, paying not | 14 | | less than specified
wages for the
created and retained | 15 | | jobs, within and for the duration of the time period
| 16 | | specified in the
legislation authorizing, or the | 17 | | administrative rules implementing, the
development
| 18 | | assistance programs and the development assistance | 19 | | agreement.
| 20 | | (2) If the recipient fails to create or retain the | 21 | | requisite number of
jobs within and
for the time period | 22 | | specified, in the legislation authorizing, or the
| 23 | | administrative rules
implementing, the development |
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| 1 | | assistance programs and the development
assistance
| 2 | | agreement, the recipient shall be deemed to no longer | 3 | | qualify for the State
economic
assistance and the | 4 | | applicable recapture provisions shall take effect.
| 5 | | (3) If the recipient receives State economic | 6 | | assistance in the form of a
High
Impact Business | 7 | | designation pursuant to Section 5.5 of the Illinois | 8 | | Enterprise
Zone Act
and the business receives the benefit | 9 | | of the exemption authorized under Section
5l of the
| 10 | | Retailers' Occupation Tax Act (for the sale of building | 11 | | materials incorporated
into a High
Impact Business | 12 | | location) or the utility tax exemption authorized under | 13 | | Section 9-222.1A of the Public Utilities Act and the | 14 | | recipient fails to create or retain the
requisite number
| 15 | | of jobs, as determined by the legislation authorizing the | 16 | | development
assistance
programs
or the administrative | 17 | | rules implementing such legislation, or both, within the
| 18 | | requisite
period of time, the recipient shall be required | 19 | | to pay to the State the full
amount of both the
State tax | 20 | | exemption and the utility tax exemption that it received | 21 | | as a result of the High Impact Business
designation.
| 22 | | (4) If the recipient receives a grant or loan pursuant | 23 | | to the Large
Business
Development Program, the Business | 24 | | Development Public Infrastructure Program, or
the
| 25 | | Industrial Training Program and the recipient fails to | 26 | | create or retain the
requisite number
of jobs for the |
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| 1 | | requisite time period, as provided in the legislation
| 2 | | authorizing the
development assistance programs or the | 3 | | administrative rules implementing such
legislation, or | 4 | | both, or in the development assistance agreement, the | 5 | | recipient
shall be
required to repay to the State a pro | 6 | | rata amount of the grant; that amount
shall
reflect
the | 7 | | percentage of the deficiency between the requisite number | 8 | | of jobs to be
created or
retained by the recipient and the | 9 | | actual number of such jobs in existence as of
the date the
| 10 | | Department determines the recipient is in breach of the | 11 | | job creation or
retention
covenants contained in the | 12 | | development assistance agreement. If the recipient
of
| 13 | | development assistance under the Large Business | 14 | | Development Program, the
Business
Development Public | 15 | | Infrastructure Program, or the Industrial Training Program
| 16 | | ceases
operations at the specific project site, during the | 17 | | 5-year period commencing on
the date of
assistance, the | 18 | | recipient shall be required to repay the entire amount of | 19 | | the
grant or to
accelerate repayment of the loan back to | 20 | | the State.
| 21 | | (5) Except as provided in paragraph (5.1), if If the | 22 | | recipient receives a tax credit under the Economic
| 23 | | Development for a
Growing Economy tax credit program, the | 24 | | development assistance agreement must
provide that (i) if | 25 | | the number of new or retained employees falls below the
| 26 | | requisite
number set forth in the development assistance |
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| 1 | | agreement, the allowance of the
credit
shall be | 2 | | automatically suspended until the number of new and | 3 | | retained employees
equals
or exceeds the requisite number | 4 | | in the development assistance agreement; (ii)
if
the
| 5 | | recipient discontinues operations at the specific project | 6 | | site during the 5-year period after the beginning of the | 7 | | first tax year for which the Department issues a tax | 8 | | credit certificate, the recipient shall
forfeit all
| 9 | | credits taken by the recipient during such 5-year period; | 10 | | and (iii) in the
event
of a
revocation or suspension of the | 11 | | credit, the Department shall contact the
Director
of | 12 | | Revenue to initiate proceedings against the recipient to | 13 | | recover
wrongfully
exempted Illinois State income taxes | 14 | | and the recipient shall promptly repay to
the
Department | 15 | | of Revenue any wrongfully exempted Illinois State income | 16 | | taxes.
The forfeited amount of credits shall be deemed | 17 | | assessed on the date the
Department
contacts the | 18 | | Department of Revenue and the recipient shall promptly | 19 | | repay to
the
Department of Revenue any wrongfully exempted | 20 | | Illinois State income taxes.
| 21 | | (5.1) For taxable years that begin on or after January | 22 | | 1, 2020 and begin prior to January 1, 2022, credits | 23 | | awarded under the Economic Development for a Growing | 24 | | Economy tax credit program shall not be revoked or | 25 | | suspended as a result of the recipient's failure to meet | 26 | | the requirements for new or retained employees if that |
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| 1 | | failure is due to a direct and substantial hardship caused | 2 | | by the COVID-19 pandemic and the Taxpayer maintains job | 3 | | creation and retention at the level of 85% of the | 4 | | Agreement requirements. For the Department to grant relief | 5 | | under this paragraph (5.1), proof of a direct and | 6 | | substantial hardship caused by the COVID-19 pandemic must | 7 | | be submitted to the Department during the annual | 8 | | certificate of verification issuance process. | 9 | | (b) The Director may elect to waive enforcement of any | 10 | | contractual provision
arising out of
the development | 11 | | assistance agreement required by this Act based on a finding
| 12 | | that the waiver is
necessary to avert an imminent and | 13 | | demonstrable hardship to the
recipient that may
result in such | 14 | | recipient's insolvency or discharge of workers.
If a waiver is
| 15 | | granted, the recipient must agree to a contractual | 16 | | modification, including
recapture provisions,
to the
| 17 | | development assistance
agreement.
The existence of
any waiver
| 18 | | granted pursuant to this subsection (b), the date of the | 19 | | granting of such
waiver, and a brief
summary of the reasons | 20 | | supporting the granting of such waiver shall be
disclosed
| 21 | | consistent with
the provisions of Section 25 of this Act.
| 22 | | (b-5) The Department shall post, on its website, (i) the | 23 | | identity of each recipient from whom amounts were recaptured | 24 | | under this Section on or after the effective date of this | 25 | | amendatory Act of the 97th General Assembly, (ii) the date of | 26 | | the recapture, (iii) a summary of the reasons supporting the |
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| 1 | | recapture, and (iv) the amount recaptured from those | 2 | | recipients. | 3 | | (c) Beginning June 1, 2004, the Department shall annually | 4 | | compile a report
on the
outcomes and effectiveness of | 5 | | recapture provisions by program, including but
not limited
to: | 6 | | (i) the total number of companies that receive development | 7 | | assistance as
defined in
this Act; (ii) the total number of | 8 | | recipients in violation of development
agreements with
the | 9 | | Department; (iii) the total number of completed recapture | 10 | | efforts; (iv) the
total
number of recapture efforts initiated; | 11 | | and (v) the number of waivers granted.
This report
shall be | 12 | | disclosed consistent with the provisions of Section 20 of this | 13 | | Act.
| 14 | | (d) For the purposes of this Act, recapture provisions do | 15 | | not include the
Illinois
Department of Transportation Economic | 16 | | Development Program, any grants under the
Industrial Training | 17 | | Program that are not given as an incentive to a
recipient | 18 | | business organization,
or any successor programs as described | 19 | | in the term "development assistance" in
Section 5
of this Act.
| 20 | | (Source: P.A. 97-2, eff. 5-6-11; 97-721, eff. 6-29-12; 98-109, | 21 | | eff. 7-25-13; 98-463, eff. 8-16-13.)
| 22 | | Section 10. The Economic Development for a Growing Economy | 23 | | Tax Credit Act is amended by changing Section 5-55 as follows:
| 24 | | (35 ILCS 10/5-55)
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| 1 | | Sec. 5-55.
Certificate of verification; submission to the | 2 | | Department of
Revenue. A Taxpayer claiming a Credit under this | 3 | | Act
shall submit to the Department of Revenue a copy of the | 4 | | Director's
certificate of verification under this Act for the | 5 | | taxable year.
However, failure to submit a copy of the | 6 | | certificate with the Taxpayer's tax
return
shall not
| 7 | | invalidate a claim for a Credit.
| 8 | | For a Taxpayer to be eligible for a certificate of | 9 | | verification, the Taxpayer
shall provide proof as required by
| 10 | | the Department prior to the end of each calendar year, | 11 | | including, but not
limited to, attestation by the
Taxpayer | 12 | | that:
| 13 | | (1) The project
has substantially achieved the level | 14 | | of new full-time jobs
specified in its Agreement.
| 15 | | (2) The project
has substantially achieved the level | 16 | | of annual payroll in Illinois
specified in its Agreement.
| 17 | | (3) The project
has substantially achieved the level | 18 | | of capital
investment in Illinois specified in its | 19 | | Agreement.
| 20 | | (4) For taxable years that begin on or after January | 21 | | 1, 2020 and begin prior to January 1, 2022, the Department | 22 | | shall not find a Taxpayer out of compliance with an | 23 | | Agreement on the basis of a failure to maintain the job | 24 | | creation or retention requirements of an Agreement so long | 25 | | as the level of job creation or retention is maintained at | 26 | | 85% of the Agreement requirements during the modification |
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| 1 | | period and the Taxpayer demonstrates to the Department, to | 2 | | the Department's satisfaction, that the failure to | 3 | | maintain the contractually required job creation and | 4 | | retention levels is due to a direct and substantial | 5 | | hardship caused by the COVID-19 pandemic. The Department | 6 | | shall require proof of a direct and substantial hardship | 7 | | caused by the COVID-19 pandemic; that determination shall | 8 | | be left to the sole and absolute discretion of the | 9 | | Department. | 10 | | (Source: P.A. 91-476, eff. 8-11-99.)
| 11 | | Section 99. Effective date. This Act takes effect upon | 12 | | becoming law. |
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