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90_HB2107
New Act
35 ILCS 5/211 new
35 ILCS 5/701 from Ch. 120, par. 7-701
35 ILCS 5/703 from Ch. 120, par. 7-703
Creates the Rural Manufacturing Incentives Program.
Provides that an eligible company may apply for incentives,
including tax credits, as part of an economic development
project in a county in Illinois whose average unemployment
rate is higher than the State's unemployment rate for the
past 5 consecutive years through the Department of Commerce
and Community Affairs. Authorizes the Department to enter
into financing agreements with the eligible company it
selects to undertake an economic development project.
Provides that an approved company may require that each
employee agree to pay a job assessment fee equal to 4% of the
gross wages of each employee whose job was created as a
result of the economic development project for the purpose of
paying debt service. Provides that the Department shall
work with the Illinois Development Finance Authority if the
issuance of bonds is necessary for the implementation of the
economic development project. Amends the Illinois Income Tax
Act. Creates tax credits for approved companies in an amount
equal to 100% of the debt service of the company plus any
job development assessment fees. Provides that the credits
are available for tax years ending on or after December 31,
1997. Provides that the credits shall be available for the
period of the financing agreement, but in no case for more
than 15 years. Effective immediately.
LRB9004298KDks
LRB9004298KDks
1 AN ACT in relation to economic development.
2 Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
4 Section 1. Short title. This Act may be cited as the
5 Rural Manufacturing Incentives Act.
6 Section 5. Legislative findings.
7 (1) The General Assembly finds and declares that the
8 general welfare and material well-being of citizens of the
9 State, and particularly those residing in qualified counties,
10 depends in large measure upon the development and growth of
11 industry in the State.
12 (2) The General Assembly further finds and declares that
13 it is in the best interest of the State to induce the
14 location of manufacturing facilities and agribusiness
15 operations within the qualified counties of the State in
16 order to advance the public purposes of relieving
17 unemployment by creating new jobs within the qualified
18 counties that but for the inducements to be offered by the
19 Department to approved companies as herein provided would not
20 exist and of creating new sources of tax revenues for the
21 support of the public services provided by the State and
22 qualified counties.
23 (3) The General Assembly further finds and declares that
24 the authority granted by this Act and the purposes to be
25 accomplished hereby are proper governmental and public
26 purposes for which public moneys may be expended, and that
27 the inducement of the location of manufacturing facilities
28 and agribusiness operations within qualified counties is of
29 paramount importance, mandating that the provisions of this
30 Act be liberally construed and applied in order to advance
31 the public purposes.
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1 Section 10. Definitions. As used in this Act:
2 "Affiliate" means the following:
3 (a) Members of a family, including only brothers
4 and sisters of the whole or half blood, spouse,
5 ancestors, and lineal descendents of an individual;
6 (b) An individual, and a corporation more than 50%
7 in value of the outstanding stock of which is owned,
8 directly or indirectly, by or for that individual;
9 (c) An individual, and a limited liability company
10 of which more than 50% of the capital interest or profits
11 are owned or controlled, directly or indirectly, by or
12 for that individual;
13 (d) Two corporations that are members of the same
14 controlled group, which includes and is limited to:
15 (1) One or more claims of corporations
16 connected through stock ownership with a common
17 parent corporation if:
18 (A) Stock possessing more than 50% of the
19 total combined voting power of all classes of
20 stock entitled to vote or more than 50% of the
21 total value of shares of all classes of stock
22 of each of the corporations, except the common
23 parent corporation, is owned by one or more of
24 the other corporations; and
25 (B) The common parent corporation owns
26 stock possessing more than 50% of the total
27 combined voting power of all classes of stock
28 entitled to vote or more than 50% of the total
29 value of shares of all classes of stock of at
30 least one of the other corporations, excluding,
31 in computing the voting power or value, stock
32 owned directly by the other corporations; or
33 (2) Two or more corporations if 5 or fewer
34 persons who are individuals, estates, or trusts own
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1 stock possessing more than 50% of the total combined
2 voting power of all classes of stock entitled to
3 vote or more than 50% of the total value of shares
4 of all classes of stock of each corporation, taking
5 into account the stock ownership of each person only
6 to the extent the stock ownership is identical with
7 respect to each corporation;
8 (e) A grantor and fiduciary of any trust;
9 (f) A fiduciary of a trust and fiduciary of another
10 trust, if the same person is a grantor of both trusts;
11 (g) A fiduciary of a trust and a beneficiary of
12 that trust;
13 (h) A fiduciary of a trust and a beneficiary of
14 another trust, if the same person is a grantor of both
15 trusts;
16 (i) A fiduciary of a trust and a corporation more
17 than 50% in value of the outstanding stock of which is
18 owned, directly or indirectly, by or for the trust or by
19 or for a person who is a grantor of the trust;
20 (j) A fiduciary of a trust and a limited liability
21 company more than 50% of the capital interest, or the
22 interest in profits, of which is owned directly or
23 indirectly, by or for the trust or by or for a person who
24 is a grantor of the trust;
25 (k) A corporation and a partnership, including a
26 registered limited liability partnership, if the same
27 persons own:
28 (1) More than 50% in value of the outstanding
29 stock of the corporation; and
30 (2) More than 50% of the capital interest, or
31 the profits interest, in the partnership, including
32 a registered limited liability partnership;
33 (l) A corporation and a limited liability company
34 if the same persons own:
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1 (1) More than 50% in value of the outstanding
2 stock of the corporation; and
3 (2) More than 50% of the capital interest or
4 the profits in the limited liability company;
5 (m) A partnership, including a registered limited
6 liability partnership, and a limited liability company if
7 the same persons own:
8 (1) More than 50% of the capital interest or
9 profits in the partnership, including a registered
10 limited liability partnership; and
11 (2) More than 50% of the capital interest or the
12 profits in the limited liability company;
13 (n) An S corporation and another S corporation if
14 the same persons own more than 50% in value of the
15 outstanding stock of each corporation, S corporation
16 designation being the same as that designation under the
17 Internal Revenue Code of 1986, as amended; or
18 (o) An S corporation and a C corporation, if the
19 same persons own more than 50% in value of the
20 outstanding stock of each corporation; S and C
21 corporation designations being the same as those
22 designations under the Internal Revenue Code of 1986, as
23 amended.
24 "Agribusiness" means any activity involving the
25 processing of raw agricultural products, including timber, or
26 the providing of value-added functions with regard to raw
27 agricultural products.
28 "Approved company" means any eligible company seeking to
29 locate an economic development project in a qualified county,
30 which eligible company is approved by the Department under
31 this Act.
32 "Approved costs" means:
33 (a) Obligations incurred for labor and to
34 contractors, subcontractors, builders, and materialmen in
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1 connection with the acquisition, construction,
2 installation, equipping, and rehabilitation of an
3 economic development project;
4 (b) The cost of acquiring land or rights in land
5 and any cost incidental thereto, including recording
6 fees;
7 (c) The cost of contract bonds and of insurance of
8 all kinds that may be required or necessary during the
9 course of acquisition, construction, installation,
10 equipping, and rehabilitation of an economic development
11 project that is not paid by the contractor or contractors
12 or otherwise provided for;
13 (d) All costs of architectural and engineering
14 services, including test borings, surveys, estimates,
15 plans and specifications, preliminary investigations, and
16 supervision of construction, as well as for the
17 performance of all the duties required by or consequent
18 upon the acquisition, construction, installation,
19 equipping, and rehabilitation of an economic development
20 project;
21 (e) All costs that shall be required to be paid
22 under the terms of any contract or contracts for the
23 acquisition, construction, installation, equipping, and
24 rehabilitation of an economic development project; and
25 (f) All other costs of a nature comparable to those
26 described above.
27 "Assessment" means the job development assessment fee
28 authorized by this Act.
29 "Authority" means the Illinois Development Finance
30 Authority as created in the Illinois Development Finance
31 Authority Act.
32 "Bonds" means the revenue bonds, notes, or other debt
33 obligations of the Authority authorized to be issued by the
34 Authority, in cooperation with the Department.
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1 "Department" means the Department of Commerce and
2 Community Affairs.
3 "Eligible economic development project" means a new or
4 expanding manufacturing company expenditure for land
5 acquisitions, site development including architectural,
6 engineering, and legal services, utility extensions, costs
7 and fees, building construction or rehabilitation, equipment
8 purchases, re-location of existing equipment including
9 installation cost, new or expanding, storage, warehousing,
10 and related office facilities on or off existing premises
11 within the qualified counties.
12 "Eligible company" means any corporation, limited
13 liability company, partnership, registered limited liability
14 partnership, sole proprietorship, business trust, or any
15 other entity engaged in manufacturing or in agribusiness.
16 "Final approval" means the action taken by the Department
17 authorizing the eligible company to receive inducements under
18 this Act.
19 "Financing agreement" means any agreement entered into,
20 pursuant to this Act, on behalf of the Department or other
21 lenders, or both, and an approved company with respect to an
22 economic development project.
23 "Inducements" means the assessment and the income tax
24 credits allowed by Section 30 of this Act and Section 211 of
25 the Illinois Income Tax Act.
26 "Manufacturing" means any activity involving the
27 manufacturing, processing, assembling, or production of any
28 property, including the processing resulting in a change in
29 the conditions of the property and any activity related to
30 it, together with the storage, warehousing, distribution, and
31 related office facilities; however, "manufacturing" shall not
32 include mining, coal or mineral processing, or extraction of
33 minerals.
34 "Preliminary approval" means the action taken by the
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1 Department conditioning final approval by the Department upon
2 satisfaction by the eligible company of the requirements
3 under this Act.
4 "Qualified county" means any county certified as such by
5 the Department under Section 15.
6 "Revenues" shall not be considered State funds.
7 Section 15. Certification of qualified counties;
8 selection of eligible companies.
9 (a) Each year the Department shall under this Act, on the
10 basis of the final unemployment figures calculated by the
11 Department of Employment Security, determine which counties
12 have had a countywide average annual unemployment rate
13 exceeding the statewide unemployment rate in the most recent
14 5 consecutive calendar years and shall certify those counties
15 as qualified counties. If the Department determines that a
16 county that has previously been certified as a qualified
17 county no longer has an unemployment rate above the State
18 average, the Department shall decertify the county. The
19 Department shall not finance any facilities in that county
20 and an approved company shall not be eligible for the
21 incentives offered by this Act unless the financing
22 agreements required herein are entered into by all parties
23 prior to July 1 of the year following the calendar year in
24 which the Department decertified that county.
25 (b) The Department shall prescribe rules to establish
26 the procedures and standards for the determination and
27 approval of eligible companies and their economic development
28 projects. The criteria for approval of eligible companies
29 and economic development projects shall include but not be
30 limited to the creditworthiness of eligible companies; the
31 number of new jobs to be provided by an economic development
32 project to residents of the State; and the likelihood of the
33 economic success of the economic development project.
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1 (c) The economic development project shall involve a
2 minimum investment of $500,000 by the eligible company and
3 shall result in the creation by the eligible company, within
4 2 years from the date of the final approval authorizing the
5 economic development project, a minimum of 15 new full-time
6 jobs at the site of the economic development project for
7 Illinois residents to be employed by the eligible company and
8 to be held by persons subject to the Illinois Income Tax Act.
9 The Department may extend this 2 year period upon the written
10 application of an eligible company requesting an extension.
11 No economic development project that will result in the
12 replacement of existing manufacturing facilities in the State
13 shall be approved by the Department; however, the Department
14 may approve an economic development project that:
15 (1) Rehabilitates a manufacturing facility:
16 (A) That has not been in operation for a
17 period of 90 or more consecutive days; or
18 (B) The title to which is vested in other than
19 the eligible company or an affiliate of the eligible
20 company and that is sold or transferred under a
21 foreclosure ordered by a court of competent
22 jurisdiction or an order of a bankruptcy court of
23 competent jurisdiction;
24 (2) Replaces a manufacturing facility existing in
25 the State:
26 (A) The title to which shall have been taken
27 under the exercise of the power of eminent domain,
28 or the title to which shall be the subject of a
29 nonappealable judgment granting the authority to
30 exercise the power of eminent domain, in either
31 event to the extent that normal operations cannot be
32 resumed at the facility within 12 months; or
33 (B) That has been damaged or destroyed by fire
34 or other casualty to the extent that normal
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1 operations cannot be resumed at the facility within
2 12 months; or
3 (3) Replaces an existing manufacturing facility
4 located in the same qualified county, and the existing
5 manufacturing facility to be replaced cannot be expanded
6 due to the unavailability of real estate at or adjacent
7 to the manufacturing facility to be replaced. Any
8 economic development project satisfying the requirements
9 of this paragraph shall only be eligible for inducements
10 to the extent of the expansion, and no inducements shall
11 be available for the equivalent of the manufacturing
12 facility to be replaced. No economic development project
13 otherwise satisfying the requirements of this paragraph
14 shall be approved by the Department which results in a
15 lease abandonment or lease termination by the approved
16 company without the consent of the lessor.
17 (d) With respect to each eligible company making an
18 application to the Department for inducements, and with
19 respect to the economic development project described in the
20 application, the Department shall request materials and make
21 inquiries of the applicant as necessary or appropriate. Upon
22 review of the application and completion of initial
23 inquiries, the Department may, by resolution, give its
24 preliminary approval by designating an eligible company as a
25 preliminarily approved company and authorizing the
26 undertaking of the economic development project. After
27 preliminary approval and completion by the eligible company
28 of its bond, loan, or other financing and review thereof by
29 the Department, the Department may by final approval
30 designate an eligible company to be an approved company.
31 Section 20. Financing agreement; terms; payback; income
32 tax credit; default; activation date. The Department may
33 enter into, with any approved company, a financing agreement
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1 with respect to its economic development project. Subject to
2 the inclusion of the mandatory provisions set forth below,
3 the terms and provisions of each financing agreement shall be
4 determined by negotiations between the Department and the
5 approved company.
6 (a) If an eligible company, at the time of submission of
7 its application to the Department to become an approved
8 company, requests the Department, in cooperation with the
9 Authority, in writing to arrange for the issuance of bonds
10 on the company's behalf, then each financing agreement used
11 in connection with the issuance of bonds by the Authority, in
12 cooperation with the Department, shall include the following
13 provisions:
14 (1) The term of a financing agreement shall not be
15 less than the last maturity of the bonds issued with
16 respect to the economic development project, except that
17 the financing agreement may terminate upon the earlier
18 redemption of all of the bonds issued with respect to the
19 economic development project and, if the Department owns
20 the economic development project, the Department may
21 grant to the approved company or its affiliate an option
22 to purchase, for the consideration the Department may
23 approve, the economic development project from the
24 Department upon the termination of the financing
25 agreement. Nothing in this paragraph shall limit the
26 extension of the term of a financing agreement if there
27 is a refunding of the correlative bonds or otherwise.
28 (2) All proceeds of any bonds incurred in connection
29 with the economic development project shall be expended
30 by the approved company within 3 years from the date of
31 the financing agreement. In the event that all proceeds
32 of bonds incurred in connection with the economic
33 development project are not fully expended within the 3
34 year period, the amount of the authorized inducements
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1 shall automatically be reduced to and shall not be
2 greater than the amount of proceeds actually expended by
3 the approved company within the 3 year period.
4 (3) The financing agreement shall specify that the
5 annual obligations of the approved company under this Act
6 shall equal in each year the annual debt service for that
7 year on the bonds issued with respect to the economic
8 development project; and the approved company shall pay
9 such obligation of the financing agreement to the trustee
10 for the bonds issued for the benefit of the approved
11 company, at such time and in such amounts sufficient to
12 amortize such bonds.
13 (4) (A) In consideration for financing agreement
14 payment, the approved company may be permitted the
15 following during the period of time not to exceed 15
16 years from the activation date in which the financing
17 agreement is in effect, which period of time shall
18 commence for purposes of the following upon the date of
19 the financing agreement.
20 (i) A 100% credit against the Illinois
21 income tax that otherwise would be owed in the
22 year to the State by the approved company on
23 the income of the approved company generated by
24 or arising out of the economic development
25 project, the credit not to exceed the total
26 debt service paid under the respective
27 financing agreement; plus
28 (ii) The aggregate assessment withheld by
29 the approved company in each year.
30 (B) The income tax credited to the approved
31 company referred to herein shall be credited for the
32 fiscal year for which the tax return of the approved
33 company is filed. The approved company shall not be
34 required to pay estimated income tax payments as
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1 prescribed in Section 803 of the Illinois Income Tax
2 Act.
3 (5) (A) The financing agreement shall provide that
4 the assessments, when added to the credit under
5 subsection (a) of Section 211 of the Illinois Income Tax
6 Act, shall not exceed the total annual debt service
7 payments of the approved company with respect to the
8 loans or other financing incurred in connection with the
9 economic development project in any year; however, to the
10 extent that such annual debt service payments excess
11 payments may recouped from excess credits or assessment
12 collections in succeeding years.
13 (B) If in any fiscal year of the approved
14 company during which the financing agreement is in
15 effect the total of the income tax credit granted to
16 the approved company plus the assessment collected
17 from the wages of the employees equals the annual
18 payment pursuant to the financing agreement
19 accumulated in prior years have been recouped, the
20 assessment collected from the wages of the employees
21 shall cease for the remainder of that fiscal year of
22 the approved company, and the approved company shall
23 resume normal personal income tax and occupational
24 license fee withholdings from the employees's wages
25 for the remainder of that fiscal year.
26 (C) If in any fiscal year of the approved
27 company during which the financing agreement is in
28 effect, the total of the income tax credit granted
29 to the approved company plus the assessment
30 collected from the wages of the employees exceeds
31 the annual payment pursuant to the financing
32 agreement, and if all excess payments pursuant to
33 the financing agreement accumulated in prior years
34 have been recouped, the approved company shall pay
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1 the excess to the State as income tax.
2 (D) If in any fiscal year of the approved
3 company during which the financing agreement is in
4 effect the assessment collected from the wages of
5 the employees exceeds the annual payment pursuant to
6 the financing agreement, and if all excess payments
7 pursuant to the financing agreement accumulated in
8 prior years have been recouped, the assessment
9 collected from the wages of the employees shall
10 cease for the remainder of that fiscal year of the
11 approved company, the approved company shall resume
12 normal personal income tax and occupational license
13 fee withholdings from the employees' wages for the
14 remainder of that fiscal year, and the approved
15 company shall remit to the State and applicable
16 local jurisdictions their respective shares of the
17 excess assessment collected on the withholding
18 filing date for employees' wages next succeeding the
19 first date when the approved company collected
20 excess assessments.
21 (6) The financing agreement shall provide in
22 substance that:
23 (A) It may be assigned by the approved company
24 only upon the prior written consent of the
25 Department following the adoption of a resolution by
26 the Department to such effect; and
27 (B) Upon default by the approved company in
28 any obligations under the financing agreement or
29 other documents evidencing, securing, or related to
30 the approved company's obligations, the Department,
31 or any of its assignees, shall have the right, at
32 its option, to declare the financing agreement or
33 such other documents in default; and
34 (i) Accelerate and declare the total of
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1 all such payments due by the approved company
2 and sell the economic development project at
3 public, private, or judicial sale;
4 (ii) Pursue any remedy provided under the
5 financing agreement or other such documents;
6 (iii) Pursue all other remedies available
7 to it under the Illinois Uniform Commercial
8 Code;
9 (iv) Be entitled to the appointment of a
10 receiver by the circuit court wherein any part
11 of the economic development project is located;
12 and
13 (v) Pursue any other remedy at law to
14 which it appears entitled.
15 (C) All remedies proved in item B of paragraph
16 (6) of subsection (a) of this Section shall be
17 cumulative.
18 (D) If an eligible company, at the time of
19 submission of its application to the Department to
20 become an approved company, does not request the
21 Department in writing to arrange with the Authority
22 for the issuance of bonds on the behalf of the
23 company, then each financing agreement used in
24 connection with loans or other financing (other than
25 bonds issued by the Authority for which subsection
26 (a) of this Section shall be used) shall include the
27 following provisions:
28 (1) The term of a financing agreement, which shall
29 commence on the date of the financing agreement, shall
30 not be longer than:
31 (A) The maturity of any loan or other
32 financing incurred in connection with the economic
33 development project, except that the financing
34 agreement may terminate upon the earlier prepayment
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1 of all loans or other financing incurred in
2 connection with the economic development project; or
3 (B) Fifteen years from the activation date.
4 (C) Nothing in this subsection shall limit the
5 extension of the term of a financing agreement if
6 there is a refinancing of the loans or other
7 financing. The authority shall not own an economic
8 development project that is the subject of this
9 form of financing agreement.
10 (2) All proceeds of any loan or other financing
11 incurred in connection with the economic development
12 project shall be expended by the approved company within
13 3 years from the date of the financing agreement. In
14 the event that all proceeds of any loan or other
15 financing incurred in connection with the economic
16 development project are not fully expended within the 3
17 year period, the authorized inducements shall
18 automatically be reduced to and shall not be greater
19 than the amount of proceeds actually expended by the
20 approved company within the 3 year period.
21 (3)(A) The approved company may be permitted the
22 following during the term of the financing agreement:
23 (i) A 100% credit against the Illinois
24 income tax that otherwise would be owed in the
25 year, as determined under the Illinois Income
26 Tax Act, to the State by the approved company
27 on the income of the approved company
28 generated by or arising out of the economic
29 development project, such credit not to exceed
30 the total debt service paid with respect to
31 the loans or other financing incurred in
32 connection with the economic development
33 project; plus
34 (ii) The aggregate assessment withheld by
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1 the approved company in each year.
2 (B) The income tax credited to the approved
3 company shall be credited for the fiscal year for
4 which the tax return of the approved company is
5 filed. The approved company shall not be required
6 to pay estimated income tax as prescribed in
7 Section 803 of the Illinois Income Tax Act.
8 (4)(A) The financing agreement shall provide
9 that the assessments, when added to the credit under
10 subsection (a) of Section 211 of the Illinois Income
11 Tax Act, shall not exceed the total annual debt
12 service payments of the approved company with
13 respect to the loans or other financing incurred in
14 connection with the economic development project in
15 any year; however, to the extent that such annual
16 debt service payments exceed credits received and
17 assessments collected in any year, the excess
18 payment may be recouped from excess credits or
19 assessment collection in succeeding years.
20 (B) If, in any fiscal year of the approved
21 company during which the financing agreement is in
22 effect, the total of the income tax credit granted
23 to the approved company, plus the assessment
24 collected form the wages of the employees, equals
25 the annual debt service payments with respect to the
26 loans or other financing incurred in connection with
27 the economic development project, and if all excess
28 payments with respect to the loans or other
29 financing incurred in connection with the economic
30 development project accumulated in prior years have
31 been recouped, the assessment collected from the
32 wages of the employees shall cease for the remainder
33 of that fiscal year of the approved company and the
34 approved company shall resume normal personal income
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1 tax and occupational license fee withholdings from
2 the employees' wages for the remainder of that
3 fiscal year.
4 (C) If in any fiscal year of the approved
5 company during which the financing agreement is in
6 effect, the total of the income tax credit granted
7 to the approved company plus the assessment
8 collected from the wages of the employees exceeds
9 the annual payment pursuant to the financing
10 agreement, and if all excess payments pursuant to
11 the financing agreement accumulated in prior years
12 have been recouped, the approved company shall pay
13 the excess to the State as income tax.
14 (D) If in any fiscal year of the approved
15 company during which the financing agreement is in
16 effect the assessment collected from the wages of
17 the employees exceeds the annual payment pursuant to
18 the financing agreement, and if all excess payments
19 pursuant to the financing agreement accumulated in
20 prior years have been recouped, the assessment
21 collected from the wages of the employees shall
22 cease for the remainder of that fiscal year of the
23 approved company, the approved company shall resume
24 normal personal income tax and occupational license
25 fee withholdings from the employees' wages for the
26 remainder of that fiscal year, and the approved
27 company shall remit to the State and applicable
28 local jurisdictions their respective shares of the
29 excess assessment collected on the withholding
30 filing date for employees' wages next succeeding the
31 first date when the approved company collected
32 excess assessments.
33 (5) The financing agreement shall provide in
34 substance that it may be assigned by the approved
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1 company only upon the prior written consent of the
2 Department following the adoption of a resolution by the
3 Department to that effect.
4 (6) The financing agreement shall provide that an
5 approved company shall require of any lender to the
6 approved company funding the loans or other financing
7 incurred in connection with the economic development
8 project written evidence to be provided to the Department
9 of payments of annual debt service to such lender. Such
10 evidence shall be provided to the Department within 45
11 days after the end of each fiscal year of the financing
12 agreement.
13 (7) The financing agreement shall provide that if
14 an approved company fails to comply with its respective
15 obligations under the financing agreement, or that the
16 lender to an approved company fails to comply with its
17 requirements set forth in paragraph (6) of subsection (b)
18 of this Section, or is declared in default under the
19 loans or other financing incurred in connection with the
20 economic development project, then the Department, or
21 any of its assignees, shall have the right, at its
22 option, to:
23 (A) Suspend the availability of the income tax
24 credits and job development assessment fees to the
25 approved company;
26 (B) Pursue any remedy provided under the financing
27 agreement, including termination thereof; and
28 (C) Pursue any other remedy at law to which it
29 appears entitled.
30 (c) All remedies provided in item (B) of paragraph (7)
31 of subsection (b) of this Section shall be deemed cumulative.
32 (d) Pursuant to this Section, the activation date shall
33 be established by the approved company in the financing
34 agreement at any time in a 2 year period after the date of
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1 final approval of the financing agreement by the authority.
2 To implement the activation date, the approved company shall
3 notify the Department, the Department of Revenue, and the
4 approved company's employees of the activation date when the
5 implementation of the inducements authorized in the financing
6 agreement shall occur. If the approved company does not
7 satisfy the minimum investment and minimum employment
8 requirements of subsection (c) of Section 15 of this Act by
9 the activation date, the approved company shall not be
10 entitled to receive inducements under this Act until the
11 approved company satisfies the requirements; however, the 15
12 year period for the term of the financing agreement shall
13 begin from the activation date. Notwithstanding the previous
14 sentence, if the approved company does not satisfy the
15 minimum investment and minimum employment requirements of
16 subsection (c) of Section 15 of this Act within 2 years from
17 the date of final approval of the financing agreement, then
18 the approved company shall be ineligible to receive
19 inducements under this Act unless an extension is approved by
20 the Department.
21 Section 25. Financing agreement; adoption; publication.
22 (a) The Department may execute and deliver a financing
23 agreement and consummate the transactions described in the
24 agreement upon:
25 (1) The adoption of a resolution by the Department
26 authorizing the financing agreement, as described in
27 subsection (b) of Section 20, with respect to an approved
28 company and loans for other financing in connection with
29 an economic development project; and
30 (2) The publication of a summary of the adopted
31 resolution in:
32 (A) A newspaper authorized to publish official
33 advertisements for the Department; and
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1 (B) A newspaper of general circulation in the
2 qualified county in which the economic development
3 project is to be located.
4 (b) The summary of the resolution as provided in
5 paragraph (2) of subsection (a) of this Section shall include
6 the following:
7 (1) The date the resolution was adopted by the
8 Department;
9 (2) The title of the resolution;
10 (3) The maximum amount of loans or other financing,
11 as described in subsection (b) of Section 20, incurred in
12 connection with the economic development project; and
13 (4) The name of the approved company.
14 Section 30. Determination of income tax credit by the
15 Department of Revenue.
16 (a) The approved company shall be entitled to a tax
17 credit as provided in Section 211 of the Illinois Income Tax
18 Act on any income that may result from the operation of the
19 approved economic development project. The credit shall be
20 equal to the total amount of the tax liability, and together
21 with the aggregate assessments not to exceed the total debt
22 service paid:
23 (1) Under the financing agreement in connection with
24 the economic development project financed by bonds as
25 described in subsection (a) of Section 20; or
26 (2) On loans or other financing, as described in
27 subsection (b) of Section 20, incurred in connection with
28 the economic development project.
29 (b) Ninety days after the filing of the tax return of
30 the approved company, the Department of Revenue shall certify
31 to the Department the income tax liability for the preceding
32 fiscal year of the approved company for which the return was
33 filed with respect to an economic development project
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1 financed through the issuance of bonds, loans, or other
2 financing incurred in connection with the economic
3 development project and the amounts of any tax credits and
4 job development assessment fees taken under the Act.
5 Section 35. Job development assessment fee; credits
6 against Illinois income and local occupational taxes.
7 (a) The approved company may require that each employee
8 subject to tax under Section 201 of the Illinois Income Tax
9 Act, as a condition of employment, agree to pay a job
10 development assessment fee, equal to 4% of the gross wages of
11 each employee whose job was created as a result of the
12 economic development project, for the purpose of retiring:
13 (1) The bonds, as described in subsection (a) of
14 Section 20 of this Act, which fund the economic
15 development project; or
16 (2) The loans or other financing as described in
17 subsection (b) of Section 20 of this Act, incurred in
18 connection with the economic development project.
19 (b) Each employee so assessed shall be entitled to
20 credits against Illinois income tax equal to the job
21 development assessment fee withheld from wages during the
22 calendar year as provided by Sections 701 and 703 of the
23 Illinois Income Tax Act.
24 (c) If an approved company shall elect to impose the
25 assessment as a condition of employment, it shall be
26 authorized to deduct the assessment from each paycheck of
27 each employee.
28 (d) Any approved company collecting an assessment as
29 provided in subsection (a) of this Section shall make its
30 payroll books and records available to the Department at such
31 reasonable times as the Department shall request and shall
32 file with the Department documentation respecting the
33 assessment as the Department may require.
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1 Any assessment of the wages of employees of an approved
2 company in connection with their employment at an economic
3 development project under subsection (a) of this Section
4 shall permanently lapse on the date:
5 (1) The bonds, as described in subsection (a) of
6 Section 20, are retired; or
7 (2) Any loans or other financing, as described in
8 subsection (b) of Section 20, incurred in connection with
9 the economic development project mature or are prepaid
10 in full.
11 Section 80. The Illinois Income Tax Act is amended by
12 adding Section 211 and changing Sections 703 and 711 as
13 follows:
14 (35 ILCS 5/211 new)
15 Sec. 211. Rural manufacturing incentive tax.
16 (a) For a period of 15 years beginning with tax years
17 ending on or after December 31, 1997, an approved company
18 under the Rural Manufacturing Incentives Act subject to this
19 Act is entitled to a credit against the tax imposed by
20 subsections (a) and (b) of Section 201 in an amount equal to
21 100% of the amount expended by the taxpayer during the tax
22 year on debt service for capital investments and expenditures
23 in Illinois as prescribed in Section 30 of the Rural
24 Manufacturing Incentives Act.
25 If the amount of credit exceeds the tax liability for the
26 year, the excess may be carried forward and applied to the
27 tax liability of the term of the financing agreement. The
28 credit shall be applied to the earliest year for which there
29 is a tax liability. If there are credits from more than one
30 tax year that are available to offset a liability, the
31 earlier credit shall be applied first.
32 (b) In addition to the tax credit provided in subsection
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1 (a), an approved company may retain, in any tax year, up to
2 4% of its employees' gross wages that otherwise would have
3 been withheld under Section 701 as provided in Section 35 of
4 the Rural Manufacturing Incentives Act. If the credit
5 allowable under subsection (a) exceeds 4% of the employees'
6 gross wages, the approved company may carry forward that
7 amount of the credit in excess of 4% of the employees' gross
8 wages to the following tax year.
9 (35 ILCS 5/701) (from Ch. 120, par. 7-701)
10 Sec. 701. Requirement and Amount of Withholding.
11 (a) In General.
12 Except as provided in Section 211, every employer
13 maintaining an office or transacting business within this
14 State and required under the provisions of the Internal
15 Revenue Code to withhold a tax on:
16 (1) compensation paid in this State (as determined
17 under Section 304 (a) (2) (B) to an individual; or
18 (2) payments described in subsection (b) shall
19 deduct and withhold from such compensation for each
20 payroll period (as defined in Section 3401 of the
21 Internal Revenue Code) an amount equal to the amount by
22 which such individual's compensation exceeds the
23 proportionate part of this withholding exemption
24 (computed as provided in Section 702) attributable to the
25 payroll period for which such compensation is payable
26 multiplied by a percentage equal to the percentage tax
27 rate for individuals provided in subsection (b) of
28 Section 201.
29 Any amounts of an employee's wages retained by the
30 employer instead of withheld, as provided in Section 35 of
31 the Rural Manufacturing Incentives Act and subsection (b) of
32 Section 211 of this Act, shall be treated as withheld for
33 purposes of payment of the employee's tax liability.
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1 (b) Payment to Residents.
2 Any payment (including compensation) to a resident by a
3 payor maintaining an office or transacting business within
4 this State and on which withholding of tax is required under
5 the provisions of the Internal Revenue Code shall be deemed
6 to be compensation paid in this State by an employer to an
7 employee for the purposes of Article 7 and Section 601 (b)
8 (1) to the extent such payment is included in the recipient's
9 base income and not subjected to withholding by another
10 state.
11 (c) Special Definitions.
12 Withholding shall be considered required under the
13 provisions of the Internal Revenue Code to the extent the
14 Internal Revenue Code either requires withholding or allows
15 for voluntary withholding the payor and recipient have
16 entered into such a voluntary withholding agreement. For the
17 purposes of Article 7 and Section 1002 (c) the term
18 "employer" includes any payor who is required to withhold tax
19 pursuant to this Section.
20 (d) Reciprocal Exemption.
21 The Director may enter into an agreement with the taxing
22 authorities of any state which imposes a tax on or measured
23 by income to provide that compensation paid in such state to
24 residents of this State shall be exempt from withholding of
25 such tax; in such case, any compensation paid in this State
26 to residents of such state shall be exempt from withholding.
27 (e) Notwithstanding subsection (a) (2) of this Section,
28 no withholding is required on payments for which withholding
29 is required under Section 3405 or 3406 of the Internal
30 Revenue Code of 1954.
31 (Source: P.A. 85-731; 86-1475.)
32 (35 ILCS 5/703) (from Ch. 120, par. 7-703)
33 Sec. 703. Information Statement.
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1 Every employer required to deduct and withhold tax under
2 this Act from compensation of an employee, or who would have
3 been required so to deduct and withhold tax if the employee's
4 withholding exemption were not in excess of $1,000, shall
5 furnish in duplicate to each such employee in respect of the
6 compensation paid by such employer to such employee during
7 the calendar year on or before January 31 of the succeeding
8 year, or, if his employment is terminated before the close of
9 such calendar year, on the date on which the last payment of
10 compensation is made, a written statement in such form as the
11 Department may by regulation prescribe showing the amount of
12 compensation paid by the employer to the employee, the amount
13 deducted and withheld as tax, and such other information as
14 the Department shall prescribe. If an employer retains an
15 employee's wages in lieu of withholding, as provided in
16 Section 35 of the Rural Manufacturing Incentives Act and
17 subsection (b) of Section 211 of this Act, the written
18 statement shall show those amounts retained by the employer
19 as withheld as tax. A copy of such statement shall be filed
20 by the employee with his return for his taxable year to which
21 it relates (as determined under section 601(b) (1).
22 (Source: P. A. 76-261.)
23 Section 99. Effective date. This Act takes effect upon
24 becoming law.