Public Act 096-1498
 
HB4599 EnrolledLRB096 13427 HLH 28156 b

    AN ACT concerning revenue.
 
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
 
    Section 5. The Small Business Job Creation Tax Credit Act
is amended by changing Sections 10, 25, and 35 as follows:
 
    (35 ILCS 25/10)
    Sec. 10. Definitions. In this Act:
    "Applicant" means a person that is operating a business
located within the State of Illinois that is engaged in
interstate or intrastate commerce and either:
        (1) has no more than 50 full-time employees, without
    regard to the location of employment of such employees at
    the beginning of the incentive period; or .
        (2) hired within the incentive period an employee who
    had participated as worker-trainee in the Put Illinois to
    Work Program during 2010.
    In the case of any person that is a member of a unitary
business group within the meaning of subdivision (a)(27) of
Section 1501 of the Illinois Income Tax Act, "applicant" refers
to the unitary business group.
    "Certificate" means the tax credit certificate issued by
the Department under Section 35 of this Act.
    "Certificate of eligibility" means the certificate issued
by the Department under Section 20 of this Act.
    "Credit" means the amount awarded by the Department to an
applicant by issuance of a certificate under Section 35 of this
Act for each new full-time equivalent employee hired or job
created.
    "Department" means the Department of Commerce and Economic
Opportunity.
    "Director" means the Director of the Department.
    "Full-time employee" means an individual who is employed
for a basic wage for at least 35 hours each week or who renders
any other standard of service generally accepted by industry
custom or practice as full-time employment.
    "Incentive period" means the period beginning July 1, 2010
and ending on June 30, 2011.
    "Basic wage" means compensation for employment that is no
less than $10 $13.75 per hour or the equivalent salary for a
new employee.
    "New employee" means a full-time employee:
        (1) who first became employed by an applicant with less
    than 50 full-time employees within the incentive period
    whose hire results in a net increase in the applicant's
    full-time Illinois employees and who is receiving a basic
    wage as compensation; or .
        (2) who participated as a worker-trainee in the Put
    Illinois to Work Program during 2010 and who is
    subsequently hired during the incentive period by an
    applicant and who is receiving a basic wage as
    compensation.
    The term "new employee" does not include:
        (1) a person who was previously employed in Illinois by
    the applicant or a related member prior to the onset of the
    incentive period; or
        (2) any individual who has a direct or indirect
    ownership interest of at least 5% in the profits, capital,
    or value of the applicant or a related member.
    "Noncompliance date" means, in the case of an applicant
that is not complying with the requirements of the provisions
of this Act, the day following the last date upon which the
taxpayer was in compliance with the requirements of the
provisions of this Act, as determined by the Director, pursuant
to Section 45 of this Act.
    "Put Illinois to Work Program" means a worker training and
employment program that was established by the State of
Illinois with funding from the United States Department of
Health and Human Services of Emergency Temporary Assistance to
Needy Families funds authorized by the American Recovery and
Reinvestment Act of 2009 (ARRA TANF Funds). These ARRA TANF
funds were in turn used by the State of Illinois to fund the
Put Illinois to Work Program.
    "Related member" means a person that, with respect to the
applicant during any portion of the incentive period, is any
one of the following,
        (1) An individual, if the individual and the members of
    the individual's family (as defined in Section 318 of the
    Internal Revenue Code) own directly, indirectly,
    beneficially, or constructively, in the aggregate, at
    least 50% of the value of the outstanding profits, capital,
    stock, or other ownership interest in the applicant.
        (2) A partnership, estate, or trust and any partner or
    beneficiary, if the partnership, estate, or trust and its
    partners or beneficiaries own directly, indirectly,
    beneficially, or constructively, in the aggregate, at
    least 50% of the profits, capital, stock, or other
    ownership interest in the applicant.
        (3) A corporation, and any party related to the
    corporation in a manner that would require an attribution
    of stock from the corporation under the attribution rules
    of Section 318 of the Internal Revenue Code, if the
    applicant and any other related member own, in the
    aggregate, directly, indirectly, beneficially, or
    constructively, at least 50% of the value of the
    corporation's outstanding stock.
        (4) A corporation and any party related to that
    corporation in a manner that would require an attribution
    of stock from the corporation to the party or from the
    party to the corporation under the attribution rules of
    Section 318 of the Internal Revenue Code, if the
    corporation and all such related parties own, in the
    aggregate, at least 50% of the profits, capital, stock, or
    other ownership interest in the applicant.
        (5) A person to or from whom there is attribution of
    stock ownership in accordance with Section 1563(e) of the
    Internal Revenue Code, except that for purposes of
    determining whether a person is a related member under this
    paragraph, "20%" shall be substituted for "5%" whenever
    "5%" appears in Section 1563(e) of the Internal Revenue
    Code.
(Source: P.A. 96-888, eff. 4-13-10.)
 
    (35 ILCS 25/25)
    Sec. 25. Tax credit.
    (a) Subject to the conditions set forth in this Act, an
applicant is entitled to a credit against payment of taxes
withheld under Section 704A of the Illinois Income Tax Act:
        (1) for new employees who participated as
    worker-trainees in the Put Illinois to Work Program during
    2010:
            (A) in the first calendar year ending on or after
        the date that is 6 months after December 31, 2010, or
        the date of hire, whichever is later. Under this
        subparagraph, the applicant is entitled to one-half of
        the credit allowable for each new employee who is
        employed for at least 6 months after the date of hire;
        and
            (B) in the first calendar year ending on or after
        the date that is 12 months after December 31, 2010, or
        the date of hire, whichever is later. Under this
        subparagraph, the applicant is entitled to one-half of
        the credit allowable for each new employee who is
        employed for at least 12 months after the date of hire;
         (2) for all other new employees, in the first calendar
    year years ending on or after the date that is 12 months
    after the date of hire of a new employee. The credit shall
    be allowed as a credit to an applicant for each full-time
    employee hired during the incentive period that results in
    a net increase in full-time Illinois employees, where the
    net increase in the employer's full-time Illinois
    employees is maintained for at least 12 months.
    (b) The Department shall make credit awards under this Act
to further job creation.
    (c) The credit shall be claimed for the first calendar year
ending on or after the date on which the certificate is issued
by the Department.
    (d) The credit shall not exceed $2,500 per new employee
hired.
    (e) The net increase in full-time Illinois employees,
measured on an annual full-time equivalent basis, shall be the
total number of full-time Illinois employees of the applicant
on June 30, 2011, minus the number of full-time Illinois
employees employed by the employer on July 1, 2010. For
purposes of the calculation, an employer that begins doing
business in this State during the incentive period, as
determined by the Director, shall be treated as having zero
Illinois employees on July 1, 2010.
    (f) The net increase in the number of full-time Illinois
employees of the applicant under subsection (e) must be
sustained continuously for at least 12 months, starting with
the date of hire of a new employee during the incentive period.
Eligibility for the credit does not depend on the continuous
employment of any particular individual. For purposes of this
subsection (f), if a new employee ceases to be employed before
the completion of the 12-month period for any reason, the net
increase in the number of full-time Illinois employees shall be
treated as continuous if a different new employee is hired as a
replacement within a reasonable time for the same position.
(Source: P.A. 96-888, eff. 4-13-10.)
 
    (35 ILCS 25/35)
    Sec. 35. Application for award of tax credit; tax credit
certificate.
    (a) On or after the conclusion of the 12-month period (or
6-month period, for purposes of subparagraph (A) of item (1) of
subsection (a) of Section 25) after a new employee has been
hired, an applicant shall file with the Department an
application for award of a credit. The application shall
include the following:
        (1) The names, Social Security numbers, job
    descriptions, salary or wage rates, and dates of hire of
    the new employees with respect to whom the credit is being
    requested, and an indication of whether each new employee
    listed participated as a worker-trainee in the Put Illinois
    to Work Program.
        (2) A certification that each new employee listed has
    been retained on the job for one year (or 6 months, for
    purposes of subparagraph (A) of item (1) of subsection (a)
    of Section 25) from the date of hire.
        (3) The number of new employees hired by the applicant
    during the incentive period.
        (4) The net increase in the number of full-time
    Illinois employees of the applicant (including the new
    employees listed in the request) between the beginning of
    the incentive period and the dates on which the new
    employees listed in the request were hired. This
    requirement does not apply for tax credits the applicant is
    seeking because the new employee had participated as a
    worker-trainee in the Put Illinois to Work Program.
        (5) An agreement that the Director is authorized to
    verify with the appropriate State agencies the information
    contained in the request before issuing a certificate to
    the applicant.
        (6) Any other information the Department determines to
    be appropriate.
    (b) Although an application may be filed at any time after
the conclusion of the 12-month period (or 6-month period, for
purposes of subparagraph (A) of item (1) of subsection (a) of
Section 25) after a new employee was hired, an application
filed more than 90 days after the earliest date on which it
could have been filed shall not be awarded any credit if, prior
to the date it is filed, the Department has received
applications under this Section for credits totaling more than
$50,000,000.
    (c) The Department shall issue a certificate to each
applicant awarded a credit under this Act. The certificate
shall include the following:
        (1) The name and taxpayer identification number of the
    applicant.
        (2) The date on which the certificate is issued.
        (3) The credit amount that will be allowed.
        (4) Any other information the Department determines to
    be appropriate.
(Source: P.A. 96-888, eff. 4-13-10.)
 
    Section 99. Effective date. This Act takes effect upon
becoming law.

Effective Date: 01/18/2011