Bill Amendment: IL HB0160 | 2017-2018 | 100th General Assembly

NOTE: For additional amemendments please see the Bill Drafting List

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Bill Title: REVENUE-TECH

Status: 2019-01-08 - Session Sine Die [HB0160 Detail]

Download: Illinois-2017-HB0160-House_Amendment_003.html

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Rep. Michael J. Zalewski

Filed: 5/29/2017

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AMENDMENT TO HOUSE BILL 160
AMENDMENT NO. ______. Amend House Bill 160, AS AMENDED, in
Article 5 of the bill, in the introductory clause to Section
5-5, by deleting "201," and by deleting "222,"; and
in Article 5 of the bill, in the body of Section 5-5, by
deleting all of Sec. 201; and
in Article 5 of the bill, in the body of Section 5-5, by
deleting all of Sec. 222; and
in Article 10 of the bill, in the body of Section 10-5, by
replacing all of Sec. 5-5 with the following:
"(35 ILCS 10/5-5)
Sec. 5-5. Definitions. As used in this Act:
"Agreement" means the Agreement between a Taxpayer and the
Department under the provisions of Section 5-50 of this Act.

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"Applicant" means a Taxpayer that is operating a business
located or that the Taxpayer plans to locate within the State
of Illinois and that is engaged in interstate or intrastate
commerce for the purpose of manufacturing, processing,
assembling, warehousing, or distributing products, conducting
research and development, providing tourism services, or
providing services in interstate commerce, office industries,
health services, professional services, or agricultural
processing, but excluding retail and , retail food, health, or
professional services. "Applicant" does not include a Taxpayer
who closes or substantially reduces an operation at one
location in the State and relocates substantially the same
operation to another location in the State. This does not
prohibit a Taxpayer from expanding its operations at another
location in the State, provided that existing operations of a
similar nature located within the State are not closed or
substantially reduced. This also does not prohibit a Taxpayer
from moving its operations from one location in the State to
another location in the State for the purpose of expanding the
operation provided that the Department determines that
expansion cannot reasonably be accommodated within the
municipality in which the business is located, or in the case
of a business located in an incorporated area of the county,
within the county in which the business is located, after
conferring with the chief elected official of the municipality
or county and taking into consideration any evidence offered by

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the municipality or county regarding the ability to accommodate
expansion within the municipality or county.
"Committee" means the Illinois Business Investment
Committee created under Section 5-25 of this Act within the
Illinois Economic Development Board.
"Credit" means the amount agreed to between the Department
and Applicant under this Act, but not to exceed the lesser of:
(1) the sum of (i) 50% of the Incremental Income Tax
attributable to the Applicant's project and (ii) 10% of the
training costs of New Employees; or (2) 100% of the Incremental
Income Tax attributable to the Applicant's project. However, if
the project is located in an underserved area, then the amount
of the Credit may not exceed the lesser of: (1) the sum of (i)
75% of the Incremental Income Tax attributable to the
Applicant's project and (ii) 10% of the training costs of New
Employees; or (2) 100% of the Incremental Income Tax
attributable to the Applicant's project.
"Department" means the Department of Commerce and Economic
Opportunity.
"Director" means the Director of Commerce and Economic
Opportunity.
"Full-time Employee" means an individual who is employed
for consideration 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. An
individual for whom a W-2 is issued by a Professional Employer

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Organization (PEO) is a full-time employee if employed in the
service of the Applicant for consideration 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 to Applicant.
"Incremental Income Tax" means the total amount withheld
during the taxable year from the compensation of New Employees
under Article 7 of the Illinois Income Tax Act arising from
employment at a project that is the subject of an Agreement.
"New Employee" means:
(a) A Full-time Employee first employed by a Taxpayer
in the project that is the subject of an Agreement and who
is hired after the Taxpayer enters into the tax credit
Agreement.
(b) The term "New Employee" does not include:
(1) an employee of the Taxpayer who performs a job
that was previously performed by another employee, if
that job existed for at least 6 months before hiring
the employee;
(2) an employee of the Taxpayer who was previously
employed in Illinois by a Related Member of the
Taxpayer and whose employment was shifted to the
Taxpayer after the Taxpayer entered into the tax credit
Agreement; or
(3) a child, grandchild, parent, or spouse, other
than a spouse who is legally separated from the

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individual, of any individual who has a direct or an
indirect ownership interest of at least 5% in the
profits, capital, or value of the Taxpayer.
(c) Notwithstanding paragraph (1) of subsection (b),
an employee may be considered a New Employee under the
Agreement if the employee performs a job that was
previously performed by an employee who was:
(1) treated under the Agreement as a New Employee;
and
(2) promoted by the Taxpayer to another job.
(d) Notwithstanding subsection (a), the Department may
award Credit to an Applicant with respect to an employee
hired prior to the date of the Agreement if:
(1) the Applicant is in receipt of a letter from
the Department stating an intent to enter into a credit
Agreement;
(2) the letter described in paragraph (1) is issued
by the Department not later than 15 days after the
effective date of this Act; and
(3) the employee was hired after the date the
letter described in paragraph (1) was issued.
"Noncompliance Date" means, in the case of a Taxpayer that
is not complying with the requirements of the Agreement or the
provisions of this Act, the day following the last date upon
which the Taxpayer was in compliance with the requirements of
the Agreement and the provisions of this Act, as determined by

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the Director, pursuant to Section 5-65.
"Pass Through Entity" means an entity that is exempt from
the tax under subsection (b) or (c) of Section 205 of the
Illinois Income Tax Act.
"Professional Employer Organization" (PEO) means an
employee leasing company, as defined in Section 206.1(A)(2) of
the Illinois Unemployment Insurance Act.
"Related Member" means a person that, with respect to the
Taxpayer during any portion of the taxable year, is any one of
the following:
(1) An individual stockholder, if the stockholder and
the members of the stockholder'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 Taxpayer's
outstanding stock.
(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 value of the
Taxpayer.
(3) A corporation, and any party related to the
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

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Section 318 of the Internal Revenue Code, if the Taxpayer
owns 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
value of the Taxpayer.
(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, for purposes of determining
whether a person is a Related Member under this paragraph,
20% shall be substituted for 5% wherever 5% appears in
Section 1563(e) of the Internal Revenue Code.
"Taxpayer" means an individual, corporation, partnership,
or other entity that has any Illinois Income Tax liability.
"Underserved area" means a geographic area that meets one
or more of the following conditions:
(1) the area has a poverty rate of at least 20%
according to the latest federal decennial census;
(2) 50% or more of the children in the area participate
in the federal free lunch program according to reported

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statistics from the State Board of Education;
(3) at least 20% of the households in the area receive
assistance under the Supplemental Nutrition Assistance
Program (SNAP); or
(4) the area has an average unemployment rate, as
determined by the Illinois Department of Employment
Security, that is more than 120% of the national
unemployment average, as determined by the U.S. Department
of Labor, for a period of at least 2 consecutive calendar
years preceding the date of the application.
(Source: P.A. 94-793, eff. 5-19-06; 95-375, eff. 8-23-07.)";
and
by replacing all of Article 15 of the bill with the following:
"ARTICLE 15. FILM AND THEATER TAX CREDITS
Section 15-5. The Film Production Services Tax Credit Act
of 2008 is amended by changing Sections 35 and 45 as follows:
(35 ILCS 16/35)
Sec. 35. Issuance of Tax Credit Certificate.
(a) In order to qualify for a tax credit under this Act, an
applicant must file an application, on forms prescribed by the
Department, providing information necessary to calculate the
tax credit, and any additional information as required by the

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Department. As part of the application, the applicant must
commit to supplying the Department with the following
information, at a minimum:
(1) an identification of each vendor that provides
goods or services that were included in the accredited
production's Illinois production spending;
(2) the amount of Illinois production spending
attributable to each vendor; and
(3) for each vendor identified under item (1), a
statement as to whether the vendor is a minority-owned
business or a female-owned business, as defined under
Section 2 of the Business Enterprise for Minorities,
Females, and Persons with Disabilities Act.
(b) Upon satisfactory review of the application, the
Department shall issue a Tax Credit Certificate stating the
amount of the tax credit to which the applicant is entitled.
(Source: P.A. 95-720, eff. 5-27-08.)
(35 ILCS 16/45)
Sec. 45. Evaluation of tax credit program; reports to the
General Assembly.
(a) The Department shall evaluate the tax credit program.
The evaluation must include an assessment of the effectiveness
of the program in creating and retaining new jobs in Illinois
and of the revenue impact of the program, and may include a
review of the practices and experiences of other states or

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nations with similar programs. Upon completion of this
evaluation, the Department shall determine the overall success
of the program, and may make a recommendation to extend,
modify, or not extend the program based on this evaluation.
(b) At the end of each fiscal quarter, the Department must
submit to the General Assembly a report that includes, without
limitation, the following information:
(1) the economic impact of the tax credit program,
including the number of jobs created and retained,
including whether the job positions are entry level,
management, talent-related, vendor-related, or
production-related;
(2) the amount of film production spending brought to
Illinois, including the amount of spending and type of
Illinois vendors hired in connection with an accredited
production; and
(3) an overall picture of whether the human
infrastructure of the motion picture industry in Illinois
reflects the geographical, racial and ethnic, gender, and
income-level diversity of the State of Illinois.
(c) At the end of each fiscal year, the Department must
submit to the General Assembly a report that includes, without
limitation, the following information:
(1) an identification of each vendor that provided
goods or services that were included in an accredited
production's Illinois production spending and a statement

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of whether the vendor is a minority-owned business or a
female-owned business, as defined under Section 2 of the
Business Enterprise for Minorities, Females, and Persons
with Disabilities Act;
(2) the aggregate amount paid to all each identified
vendors vendor by the accredited production;
(3) the aggregate amount paid to all identified vendors
that are for each identified vendor, a statement as to
whether the vendor is a minority owned businesses business
or a female owned businesses business, as defined under
Section 2 of the Business Enterprise for Minorities,
Females, and Persons with Disabilities Act; and
(4) a description of any steps taken by the Department
to encourage accredited productions to use vendors who are
a minority owned business or a female owned business.
(Source: P.A. 95-720, eff. 5-27-08.)
Section 15-10. The Live Theater Production Tax Credit Act
is amended by changing Sections 10-40 and 10-50 as follows:
(35 ILCS 17/10-40)
Sec. 10-40. Issuance of Tax Credit Award Certificate.
(a) In order to qualify for a tax credit award under this
Act, an applicant must file an application for each accredited
theater production at each of the applicant's qualified
production facilities, on forms prescribed by the Department,

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providing information necessary to calculate the tax credit
award and any additional information as reasonably required by
the Department. As part of the application, the applicant must
commit to supplying the Department with the following
information, at a minimum:
(1) an identification of each vendor that provides
goods or services that were included in the accredited
production's Illinois production spending;
(2) the amount of Illinois production spending
attributable to each vendor; and
(3) for each vendor identified under item (1), a
statement as to whether the vendor is a minority-owned
business or a female-owned business, as defined under
Section 2 of the Business Enterprise for Minorities,
Females, and Persons with Disabilities Act.
(b) Upon satisfactory review of the application, the
Department shall issue a tax credit award certificate stating
the amount of the tax credit award to which the applicant is
entitled for that tax year and shall contemporaneously notify
the applicant and Illinois Department of Revenue in accordance
with Section 222 of the Illinois Income Tax Act.
(Source: P.A. 97-636, eff. 6-1-12.)
(35 ILCS 17/10-50)
Sec. 10-50. Live theater tax credit award program
evaluation and reports.

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(a) The Department's live theater tax credit award
evaluation must include:
(i) an assessment of the effectiveness of the program
in creating and retaining new jobs in Illinois;
(ii) an assessment of the revenue impact of the
program;
(iii) in the discretion of the Department, a review of
the practices and experiences of other states or nations
with similar programs; and
(iv) an assessment of the overall success of the
program. The Department may make a recommendation to
extend, modify, or not extend the program based on the
evaluation.
(b) At the end of each fiscal quarter, the Department shall
submit to the General Assembly a report that includes, without
limitation:
(i) an assessment of the economic impact of the
program, including the number of jobs created and retained,
and whether the job positions are entry level, management,
vendor, or production related;
(ii) the amount of accredited theater production
spending brought to Illinois, including the amount of
spending and type of Illinois vendors hired in connection
with an accredited theater production; and
(iii) a determination of whether those receiving
qualifying Illinois labor expenditure salaries or wages

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reflect the geographical, racial and ethnic, gender, and
income level diversity of the State of Illinois.
(c) At the end of each fiscal year, the Department shall
submit to the General Assembly a report that includes, without
limitation:
(i) the identification of each vendor that provided
goods or services that were included in an accredited
theater production's Illinois production spending and a
statement of whether the vendor is a minority-owned
business or a female-owned business, as defined under
Section 2 of the Business Enterprise for Minorities,
Females, and Persons with Disabilities Act;
(ii) a statement of (A) the aggregate amount paid to
all each identified vendors vendor by the accredited
theater production and (B) the aggregate amount paid to all
identified vendors that are minority-owned businesses or
female-owned businesses, as defined under Section 2 of the
Business Enterprise for Minorities, Females, and Persons
with Disabilities Act and whether the vendor is a minority
or female owned business as defined in Section 2 of the
Business Enterprise for Minorities, Females, and Persons
with Disabilities Act; and
(iii) a description of the steps taken by the
Department to encourage accredited theater productions to
use vendors who are minority or female owned businesses.
(Source: P.A. 97-636, eff. 6-1-12.)".