Public Act 93-0552
HB0235 Enrolled LRB093 02644 ACG 02654 b
AN ACT concerning corporations.
Be it enacted by the People of the State of
Illinois, represented in the General Assembly:
Section 1. Short title. This Act may be cited as the
Corporate Accountability for Tax Expenditures Act.
Section 5. Definitions. As used in this Act: "Base
years" means the first 2 complete calendar years
following the effective date of a recipient receiving
development assistance.
"Date of assistance" means the commencement date of
the assistance agreement, which date triggers the period
during which the recipient is obligated to create or
retain jobs and continue operations at the specific
project site.
"Default" means that a recipient has not achieved its
job creation, job retention, or wage or benefit goals,
as applicable, during the prescribed period therefor.
"Department" means, unless otherwise noted, the
Department of Commerce and Community Affairs or any
successor agency.
"Development assistance" means (1) tax credits and
tax exemptions (other than given under tax increment
financing) given as an incentive to a recipient business
organization pursuant to an initial certification or an
initial designation made by the Department under the
Economic Development for a Growing Economy Tax Credit
Act and the Illinois Enterprise Zone Act, including the
High Impact Business program, (2) grants or loans given
to a recipient as an incentive to a business
organization pursuant to the Large Business Development
Program, the Business Development Public Infrastructure
Program, or the Industrial Training Program, (3) the
State Treasurer's Economic Program Loans, (4) the
Illinois Department of Transportation Economic
Development Program, and (5) all successor and
subsequent programs and tax credits designed to promote
large business relocations and expansions. "Development
assistance" does not include tax increment financing,
assistance provided under the Illinois Enterprise Zone
Act pursuant to local ordinance, participation loans, or
financial transactions through statutorily authorized
financial intermediaries in support of small business
loans and investments or given in connection with the
development of affordable housing.
"Development assistance agreement" means any
agreement executed by the State granting body and the
recipient setting forth the terms and conditions of
development assistance to be provided to the recipient
consistent with the final application for development
assistance, including but not limited to the date of
assistance, submitted to and approved by the State
granting body.
"Full-time, permanent job" means either: (1) the
definition therefor in the legislation authorizing the
programs described in the definition of development
assistance in the Act or (2) if there is no such
definition, then as defined in administrative rules
implementing such legislation, provided the
administrative rules were in place prior to the
effective date of this Act. On and after the effective
date of this Act, if there is no definition of
"full-time, permanent job" in either the legislation
authorizing a program that constitutes economic
development assistance under this Act or in any
administrative rule implementing such legislation that
was in place prior to the effective date of this Act,
then "full-time, permanent job" means a job in which the
new employee works for the recipient at a rate of at
least 35 hours per week.
"New employee" means either: (1) the definition
therefor in the legislation authorizing the programs
described in the definition of development assistance in
the Act or (2) if there is no such definition, then as
defined in administrative rules implementing such
legislation, provided
the administrative rules were in place prior to the
effective date of this Act. On and after the effective
date of this Act, if there is no definition of "new
employee" in either the legislation authorizing a
program that constitutes economic development assistance
under this Act nor in any administrative rule
implementing such legislation that was in place prior to
the effective date of this Act, then "new employee"
means a full-time, permanent employee who represents a
net increase in the number of the recipient's employees
statewide. "New employee" includes an employee who
previously filled a new employee position with the
recipient who was rehired or called back from a layoff
that occurs during or following the base years.
The term "New Employee" does not include any of the
following: (1) An employee of the recipient who performs
a job that was previously performed by another employee
in this State, if that job existed in this State for at
least 6 months before hiring the employee. (2) A child,
grandchild, parent, or spouse, other than a spouse who
is legally separated from the individual, of any
individual who has a direct or indirect ownership
interest of at least 5% in the profits, capital, or
value of any member of the recipient.
"Part-time job" means either: (1) the definition
therefor in the legislation authorizing the programs
described in the definition of development assistance in
the Act or (2) if there is no such definition, then as
defined in administrative rules implementing such
legislation, provided
the administrative rules were in place prior to the
effective date of this Act. On and after the effective
date of this Act, if there is no definition of
"part-time job" in either the legislation authorizing a
program that constitutes economic development assistance
under this Act or in any administrative rule
implementing such legislation that was in place prior to
the effective date of this Act, then "part-time job"
means a job in which the new employee works for the
recipient at a rate of less than 35 hours per week.
"Recipient" means any business that receives economic
development assistance. A business is any corporation,
limited liability company, partnership, joint venture,
association, sole proprietorship, or other legally
recognized entity. "Retained employee" means either: (1)
the definition therefor in the legislation authorizing
the programs described in the definition of development
assistance in the Act or (2) if there is no such
definition, then as defined in
administrative rules implementing such legislation,
provided the administrative rules were in place prior to
the effective date of this Act. On and after the
effective date of this Act, if there is no definition of
"retained employee" in either the legislation
authorizing a program that constitutes economic
development assistance under this Act or in any
administrative rule implementing such legislation that
was in place prior to the effective date of this Act,
then "retained employee" means any employee defined as
having a full-time or full-time equivalent job preserved
at a specific facility or site, the continuance of which
is threatened by a specific
and demonstrable threat, which shall be specified in the
application for development assistance.
"Specific project site" means that distinct
operational unit to which any development assistance is
applied.
"State granting body" means the Department, any State
department or State agency that provides development
assistance that has reporting requirements under this
Act,
and any successor agencies to any of the preceding.
"Temporary job" means either: (1) the definition
therefor
in the legislation authorizing the programs described in
the
definition of development assistance in the Act or (2)
if
there is no such definition, then as defined in
administrative rules implementing such legislation,
provided
the administrative rules were in place prior to the
effective
date of this Act. On and after the effective date of
this
Act, if there is no definition of "temporary job" in
either
the legislation authorizing a program that constitutes
economic development assistance under this Act or in any
administrative rule implementing such legislation that
was in
place prior to the effective date of this Act, then
"temporary job" means a job in which the new employee is
hired for a specific duration of time or season.
"Value of assistance" means the face value of any form
of
development assistance.
Section 10. Unified Economic Development Budget.
(a) For each State fiscal year ending on or after June
30, 2005, the Department of Revenue shall submit an
annual
Unified Economic Development Budget to the General
Assembly.
The Unified Economic Development Budget shall be due
within 3
months after the end of the fiscal year, and shall
present
all types of development assistance granted during the
prior
fiscal year, including:
(1) The aggregate amount of uncollected or diverted
State tax revenues resulting from each type of
development assistance provided in the tax statutes, as
reported to the Department of Revenue on tax returns
filed during the fiscal year.
(2) All State development assistance.
(b) All data contained in the Unified Economic
Development Budget presented to the General Assembly
shall be
fully subject to the Freedom of Information Act.
(c) The Department of Revenue shall submit a report of
the amounts in subdivision (a)(1) of this Section to the
Department, which may append such report to the Unified
Economic Development Budget rather than separately
reporting
such amounts.
Section 15. Standardized applications for State
development assistance.
(a) All final applications submitted to the Department
or
any other State granting body requesting development
assistance shall contain, at a minimum:
(1) An application tracking number that is specific
to both the State granting agency and to each
application.
(2) The office mailing addresses, office telephone
number, and chief officer of the granting body.
(3) The office mailing address, telephone number,
4-digit SIC number or successor number, and the name of
the chief officer of the applicant or authorized
designee
for the specific project site for which development
assistance is requested.
(4) The applicant's total number of employees at the
specific project site on the date that the application
is
submitted to the State granting body, including the
number of full-time, permanent jobs, the number of
part-time jobs, and the number of temporary jobs.
(5) The type of development assistance and value of
assistance being requested.
(6) The number of jobs to be created and retained or
both created and retained by the applicant as a result
of
the development assistance, including the number of
full-time, permanent jobs, the number of part-time jobs,
and the number of temporary jobs.
(7) A detailed list of the occupation or job
classifications and number of new employees or retained
employees to be hired in full-time, permanent jobs, a
schedule of anticipated starting dates of the new hires
and the anticipated average wage by occupation or job
classification and total payroll to be created as a
result of the development assistance.
(8) A list of all other forms of development
assistance that the applicant is requesting for the
specific project site and the name of each State
granting
body from which that development assistance is being
requested.
(9) A narrative, if necessary, describing why the
development assistance is needed and how the applicant's
use of the development assistance may reduce employment
at any site in Illinois.
(10) A certification by the chief officer of the
applicant or his or her authorized designee that the
information contained in the application submitted to
the
granting body contains no knowing misrepresentation of
material facts upon which eligibility for development
assistance is based.
(b) Every State granting body either shall complete, or
shall require the applicant to complete, an application
form
that meets the minimum requirements as prescribed in
this
Section each time an applicant applies for development
assistance covered by this Act.
(c) The Department shall have the discretion to modify
any standardized application for State development
assistance
required under subsection (a) for any grants under the
Industrial Training Program that are not given as an
incentive to a recipient business organization.
Section 20. State development assistance disclosure.
(a) Beginning February 1, 2005 and each year thereafter,
every State granting body shall submit to the Department
copies of all development assistance agreements that it
approved in the prior calendar year.
(b) For each development assistance agreement for which
the date of assistance has occurred in the prior
calendar
year, each recipient shall submit to the Department a
progress report that shall include, but not be limited
to,
the following:
(1) The application tracking number.
(2) The office mailing address, telephone number,
and the name of the chief officer of the granting body.
(3) The office mailing address, telephone number,
4-digit SIC number or successor number, and the name of
the chief officer of the applicant or authorized
designee
for the specific project site for which the development
assistance was approved by the State granting body.
(4) The type of development assistance program and
value of assistance that was approved by the State
granting body.
(5) The applicant's total number of employees at the
specific project site on the date that the application
was submitted to the State granting body and the
applicant's total number of employees at the specific
project site on the date of the report, including the
number of full-time, permanent jobs, the number of
part-time jobs, and the number of temporary jobs, and a
computation of the gain or loss of jobs in each
category.
(6) The number of new employees and retained
employees the applicant stated in its development
assistance agreement, if any, if not, then in its
application, would be created by the development
assistance broken down by full-time, permanent,
part-time, and temporary.
(7) A declaration of whether the recipient is in
compliance with the development assistance agreement.
(8) A detailed list of the occupation or job
classifications and number of new employees or retained
employees to be hired in full-time, permanent jobs, a
schedule of anticipated starting dates of the new hires
and the actual average wage by occupation or job
classification and total payroll to be created as a
result of the development assistance.
(9) A narrative, if necessary, describing how the
recipient's use of the development assistance during the
reporting year has reduced employment at any site in
Illinois.
(10) A certification by the chief officer of the
applicant or his or her authorized designee that the
information in the progress report contains no knowing
misrepresentation of material facts upon which
eligibility for development assistance is based.
(c) The State granting body, or a successor agency,
shall
have full authority to verify information contained in
the
recipient's progress report, including the authority to
inspect the specific project site and inspect the
records of
the recipient that are subject to the development
assistance
agreement.
(d) By June 1, 2005 and by June 1 of each year
thereafter, the Department shall compile and publish all
data
in all of the progress reports in both written and
electronic
form.
(e) If a recipient of development assistance fails to
comply with subsection (b) of this Section, the
Department
shall, within 20 working days after the reporting
submittal
deadlines set forth in (i) the legislation authorizing,
(ii)
the administrative rules implementing, or (iii) specific
provisions in development assistance agreements
pertaining to
the development assistance programs, suspend within 33
working days any current development assistance to the
recipient under its control, and shall be prohibited
from
completing any current or providing any future
development
assistance until it receives proof that the recipient
has
come into compliance with the requirements of subsection
(b)
of this Section.
(f) The Department shall have the discretion to modify
the information required in the progress report required
under subsection (b) consistent with the disclosure
purpose
of this Section for any grants under the Industrial
Training
Program that are not given as an incentive to a
recipient
business organization.
Section 25. Recapture.
(a) All development assistance agreements shall contain,
at a minimum, the following recapture provisions:
(1) The recipient must (i) make the level of capital
investment in the economic development project specified
in the development assistance agreement; (ii) create or
retain, or both, the requisite number of jobs, paying
not
less than specified wages for the created and retained
jobs, within and for the duration of the time period
specified in the legislation authorizing, or the
administrative rules implementing, the development
assistance programs and the development assistance
agreement.
(2) If the recipient fails to create or retain the
requisite number of jobs within and for the time period
specified, in the legislation authorizing, or the
administrative rules implementing, the development
assistance programs and the development assistance
agreement, the recipient shall be deemed to no longer
qualify for the State economic assistance and the
applicable recapture provisions shall take effect.
(3) If the recipient receives State economic
assistance in the form of a High Impact Business
designation pursuant to Section 5.5 of the Illinois
Enterprise Zone Act and the business receives the
benefit
of the exemption authorized under Section 5l of the
Retailers' Occupation Tax Act (for the sale of building
materials incorporated into a High Impact Business
location) and the recipient fails to create or retain
the
requisite number of jobs, as determined by the
legislation authorizing the development assistance
programs or the administrative rules implementing such
legislation, or both, within the requisite period of
time, the recipient shall be required to pay to the
State
the full amount of the State tax exemption that it
received as a result of the High Impact Business
designation.
(4) If the recipient receives a grant or loan
pursuant to the Large Business Development Program, the
Business Development Public Infrastructure Program, or
the Industrial Training Program and the recipient fails
to create or retain the requisite number of jobs for the
requisite time period, as provided in the legislation
authorizing the development assistance programs or the
administrative rules implementing such legislation, or
both, or in the development assistance agreement, the
recipient shall be required to repay to the State a pro
rata amount of the grant; that amount shall reflect the
percentage of the deficiency between the requisite
number
of jobs to be created or retained by the recipient and
the actual number of such jobs in existence as of the
date the Department determines the recipient is in
breach
of the job creation or retention covenants contained in
the development assistance agreement. If the recipient
of
development assistance under the Large Business
Development Program, the Business Development Public
Infrastructure Program, or the Industrial Training
Program ceases operations at the specific project site,
during the 5-year period commencing on the date of
assistance, the recipient shall be required to repay the
entire amount of the grant or to accelerate repayment of
the loan back to the State.
(5) If the recipient receives a tax credit under the
Economic Development for a Growing Economy tax credit
program, the development assistance agreement must
provide that (i) if the number of new or retained
employees falls below the requisite number set forth in
the development assistance agreement, the allowance of
the credit shall be automatically suspended until the
number of new and retained employees equals or exceeds
the requisite number in the development assistance
agreement; (ii) if the recipient discontinues operations
at the specific project site during the first 5 years of
the 10-year term of the development assistance
agreement,
the recipient shall forfeit all credits taken by the
recipient during such 5-year period; and (iii) in the
event of a revocation or suspension of the credit, the
Department shall contact the Director of Revenue to
initiate proceedings against the recipient to recover
wrongfully exempted Illinois State income taxes and the
recipient shall promptly repay to the Department of
Revenue any wrongfully exempted Illinois State income
taxes. The forfeited amount of credits shall be deemed
assessed on the date the Department contacts the
Department of Revenue and the recipient shall promptly
repay to the Department of Revenue any wrongfully
exempted Illinois State income taxes.
(b) The Director may elect to waive enforcement of any
contractual provision arising out of the development
assistance agreement required by this Act based on a
finding
that the waiver is necessary to avert an imminent and
demonstrable hardship to the recipient that may result
in
such recipient's insolvency or discharge of workers. If
a
waiver is granted, the recipient must agree to a
contractual
modification, including recapture provisions, to the
development assistance agreement. The existence of any
waiver
granted pursuant to this subsection (c), the date of the
granting of such waiver, and a brief summary of the
reasons
supporting the granting of such waiver shall be
disclosed
consistent with the provisions of Section 25 of this
Act.
(c) Beginning June 1, 2004, the Department shall
annually compile a report on the outcomes and
effectiveness
of recapture provisions by program, including but not
limited
to:
(i) the total number of companies that receive
development assistance as defined in this Act;
(ii) the
total
number of recipients in violation of development
agreements
with the Department;
(iii) the total number of completed
recapture efforts;
(iv) the total number of recapture
efforts
initiated; and
(v) the number of waivers granted. This
report
shall be disclosed consistent with the provisions of
Section 20 of this Act.
(d) For the purposes of this Act, recapture provisions
do
not include the Illinois Department of Transportation
Economic Development Program, any grants under the
Industrial
Training Program that are not given as an incentive to a
recipient business organization, or any successor
programs as
described in the term "development assistance" in
Section 5
of this Act.
Section 99. Effective date. This Act takes effect upon
becoming law.
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