Bill Text: IL HB5255 | 2021-2022 | 102nd General Assembly | Introduced

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Bill Title: Creates the Business Location Efficiency Incentive Act of 2022. Provides that a company or its representative that negotiates or applies for economic development assistance from the Department of Commerce and Economic Opportunity may apply for increased economic development assistance if the project is located in an area that satisfies the Act's standards for affordable workforce housing or affordable and accessible mass transit. Amends the Economic Development for a Growing Economy Tax Credit Act. Provides that the Department may not enter into any new agreements after June 30, 2032 (currently, June 30, 2022). Makes changes concerning the maximum credit amount under the Act. Provides that the Department of Commerce and Economic Opportunity may award a taxpayer an increased credit amount or other benefits within the agreement if the taxpayer demonstrates that, in addition to the investment at the project location, the taxpayer plans to make a non-project-specific capital investment in the furtherance of community or supply-chain development within the general surrounding area of the project. Effective immediately, except that provisions creating the Business Location Efficiency Incentive Act of 2022 take effect on January 1, 2023.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2022-02-18 - Rule 19(a) / Re-referred to Rules Committee [HB5255 Detail]

Download: Illinois-2021-HB5255-Introduced.html

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102ND GENERAL ASSEMBLY State of Illinois 2021 and 2022 HB5255 Introduced , by Rep. Keith R. Wheeler SYNOPSIS AS INTRODUCED:
New Act
35 ILCS 10/5-5
35 ILCS 10/5-45
35 ILCS 10/5-77
Creates the Business Location Efficiency Incentive Act of 2022. Provides that a company or its representative that negotiates or applies for economic development assistance from the Department of Commerce and Economic Opportunity may apply for increased economic development assistance if the project is located in an area that satisfies the Act's standards for affordable workforce housing or affordable and accessible mass transit. Amends the Economic Development for a Growing Economy Tax Credit Act. Provides that the Department may not enter into any new agreements after June 30, 2032 (currently, June 30, 2022). Makes changes concerning the maximum credit amount under the Act. Provides that the Department of Commerce and Economic Opportunity may award a taxpayer an increased credit amount or other benefits within the agreement if the taxpayer demonstrates that, in addition to the investment at the project location, the taxpayer plans to make a non-project-specific capital investment in the furtherance of community or supply-chain development within the general surrounding area of the project. Effective immediately, except that provisions creating the Business Location Efficiency Incentive Act of 2022 take effect on January 1, 2023.
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A BILL FOR
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AN ACT concerning revenue.
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
Business Location Efficiency Incentive Act of 2022.
Section 5. Definitions. In this Act:
"Accessible and affordable mass transit" means access to
transit stops with regular and frequent service within one
mile from the project site and pedestrian access to transit
stops.
"Affordable workforce housing" means owner-occupied or
rental housing that costs, based on current census data for
the municipality where the project is located or any
municipality within 3 miles of the municipality where the
project is located, no more than 35% of the median salary at
the project site, exclusive of the highest 10% of the site's
salaries. If the project is located in an unincorporated area,
"affordable workforce housing" means no more than 35% of the
median salary at the project site, excluding the highest 10%
of the site's salaries, based on the median cost of rental or
of owner-occupied housing in the county where the
unincorporated area is located.
"Applicant" means a company or its representative that

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negotiates or applies for economic development assistance from
the Department.
"Department" or "DCEO" means the Department of Commerce
and Economic Opportunity.
"Economic development assistance" means State tax credits
and tax exemptions given as an incentive to an eligible
company after certification by DCEO under the Economic
Development for a Growing Economy Tax Credit Act (EDGE).
"Employee housing or transportation remediation plan"
means a plan to increase affordable housing or transportation
options, or both, for employees earning up to the median
annual salary of the workforce at the project. The plan may
include, but is not limited to, an employer-financed or
assisted housing program that can be supplemented by State or
federal grants, shuttle services between the place of
employment and existing transit stops or other reasonably
accessible places, facilitation of employee carpooling, or
similar services.
"Existence of infrastructure" means the existence within
1,500 feet of the proposed site of roads, sewers, sidewalks,
and other utilities and a description of the investments or
improvements, if any, that an applicant expects State or local
government to make to that infrastructure.
"Location efficient" means a project that maximizes the
use of existing investments in infrastructure, avoids or
minimizes additional government expenditures for new

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infrastructure, and has nearby housing affordable to the
permanent workforce of the project or has accessible and
affordable mass transit or its equivalent or some combination
of both.
"Location efficiency report" means a report that is
prepared by an applicant for increased State economic
development assistance under Section 10 and follows this Act
and any related Department guidelines, and that describes the
existence of (i) affordable workforce housing or (ii)
accessible and affordable mass transit or its equivalent.
Section 10. Economic development assistance awards.
(a) An applicant that also wants to be considered for
increased economic development assistance under this Act shall
submit a location efficiency report.
(b) The Department may give an applicant an increased tax
credit or extension if the applicant's location efficiency
report demonstrates that the applicant is seeking assistance
for a project to be located in an area that satisfies this
Act's standards for affordable workforce housing or affordable
and accessible mass transit. If the Department determines from
the location efficiency report that the applicant is seeking
assistance in an area that is not location efficient, the
Department may award an increase in State economic development
assistance if an applicant (i) submits, and the Department
accepts, an applicant's employee housing and transportation

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remediation plan or (ii) creates jobs in a labor surplus area,
as defined by the Department of Employment Security at the end
of each calendar year.
(c) Applicants locating or expanding at location-efficient
sites, with approved location efficiency plans, or creating
jobs in labor surplus areas may receive (i) up to 10% more than
the maximum allowable tax credits for which they are eligible
under the Economic Development for a Growing Economy Tax
Credit Act, but not to equal or exceed 100% of the applicant's
tax liability or (ii) such other adjustment of those tax
credits, including but not limited to extensions, as the
Department deems appropriate.
(d) The Department may provide technical assistance to
employers requesting assistance in developing an appropriate
employee housing or transportation plan.
Section 15. Summaries; progress reports.
(a) The Department shall include summaries of the initial
employee housing or transportation plans for each assisted
project in the annual compilation and publication of project
progress reports required under subsection (d) of Section 20
of the Corporate Accountability for Tax Expenditures Act.
Companies that fail to do so or that make inadequate progress
shall have their increased tax credit or extension eliminated.
Applicants and submitted data are subject to all disclosure,
reporting, and recapture provisions provided under the

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Corporate Accountability for Tax Expenditure Act.
(b) By June 1, 2023 and by June 1 of each year thereafter
through 2032, the Department shall include, when appropriate,
data on the outcomes or status of approved employee housing or
transportation plans in the project progress reports required
under the Corporate Accountability for Tax Expenditure Act.
Section 20. Duration of incentives; report to General
Assembly.
(a) Any multi-year incentive awarded under this Act shall
continue for the time period called for in the agreement with
the Department and shall not be altered by the repeal of this
Act.
(b) By January 1, 2024, the Department shall submit to the
Speaker of the House of Representatives and the President of
the Senate, for assignment to the appropriate committees, a
report on the incentives awarded under this Act and the
Department's activities, findings, and recommendations with
respect to this Act and its extension, amendment, or repeal.
The report, when acted upon by those committees, shall be
distributed to each member of the General Assembly.
Section 25. Repeal. This Act is repealed on December 31,
2032.
Section 900. The Economic Development for a Growing

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Economy Tax Credit Act is amended by changing Sections 5-5,
5-45, and 5-77 as follows:
(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.
"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,
or agricultural processing, but excluding retail, 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

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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 the municipality or county regarding the ability to
accommodate expansion within the municipality or county.
"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 New Employees at the Applicant's project and
(ii) 10% of the training costs of New Employees; or (2) 100% of
the Incremental Income Tax attributable to New Employees at
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 New Employees at the Applicant's
project and (ii) 10% of the training costs of New Employees; or
(2) 100% of the Incremental Income Tax attributable to New
Employees at the Applicant's project. If an Applicant agrees
to hire the required number of New Employees, then the maximum
amount of the Credit for that Applicant may be increased by an
amount not to exceed 50% 25% of the Incremental Income Tax
attributable to retained employees at the Applicant's project;
however, if the project is located in an underserved area,

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then the amount of the Credit for that Applicant may be
increased by an amount not to exceed 75% of the Incremental
Income Tax attributable to retained employees at the
Applicant's project. In provided that, in order to receive the
increase for retained employees, the Applicant must provide
the additional evidence required under paragraph (3) of
subsection (b) of Section 5-25.
"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
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
and, if applicable, retained employees under Article 7 of the
Illinois Income Tax Act arising from employment at a project
that is the subject of an Agreement.

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"New Construction EDGE Agreement" means the Agreement
between a Taxpayer and the Department under the provisions of
Section 5-51 of this Act.
"New Construction EDGE Credit" means an amount agreed to
between the Department and the Applicant under this Act as
part of a New Construction EDGE Agreement that does not exceed
50% of the Incremental Income Tax attributable to New
Construction EDGE Employees at the Applicant's project;
however, if the New Construction EDGE Project is located in an
underserved area, then the amount of the New Construction EDGE
Credit may not exceed 75% of the Incremental Income Tax
attributable to New Construction EDGE Employees at the
Applicant's New Construction EDGE Project.
"New Construction EDGE Employee" means a laborer or worker
who is employed by an Illinois contractor or subcontractor in
the actual construction work on the site of a New Construction
EDGE Project, pursuant to a New Construction EDGE Agreement.
"New Construction EDGE Incremental Income Tax" means the
total amount withheld during the taxable year from the
compensation of New Construction EDGE Employees.
"New Construction EDGE Project" means the building of a
Taxpayer's structure or building, or making improvements of
any kind to real property. "New Construction EDGE Project"
does not include the routine operation, routine repair, or
routine maintenance of existing structures, buildings, or real
property.

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"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
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

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(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
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

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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
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

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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) 75% or more of the children in the area
participate in the federal free lunch program according to
reported 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

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years preceding the date of the application.
(Source: P.A. 101-9, eff. 6-5-19; 102-330, eff. 1-1-22.)
(35 ILCS 10/5-45)
Sec. 5-45. Amount and duration of the credit.
(a) The Department shall determine the amount and duration
of the credit awarded under this Act. The duration of the
credit may not exceed 10 taxable years. The credit may be
stated as a percentage of the Incremental Income Tax
attributable to the applicant's project and may include a
fixed dollar limitation.
(b) Notwithstanding subsection (a), and except as the
credit may be applied in a carryover year pursuant to Section
211(4) of the Illinois Income Tax Act, the credit may be
applied against the State income tax liability in more than 10
taxable years but not in more than 15 taxable years for an
eligible business that (i) qualifies under this Act and the
Corporate Headquarters Relocation Act and has in fact
undertaken a qualifying project within the time frame
specified by the Department of Commerce and Economic
Opportunity under that Act, and (ii) applies against its State
income tax liability, during the entire 15-year period, no
more than 60% of the maximum credit per year that would
otherwise be available under this Act.
(c) Nothing in this Section shall prevent the Department,
in consultation with the Department of Revenue, from adopting

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rules to extend the sunset of any earned, existing, and unused
tax credit or credits a taxpayer may be in possession of, as
provided for in Section 605-1070 605-1055 of the Department of
Commerce and Economic Opportunity Law of the Civil
Administrative Code of Illinois, notwithstanding the
carry-forward provisions pursuant to paragraph (4) of Section
211 of the Illinois Income Tax Act.
(d) Notwithstanding subsection (a) or (b), a recipient of
a credit may request a certificate of transferability of
credit from the Department for the amount of credit not
previously claimed. A transferability certificate so issued
may be transferred or sold by the recipient to another
Illinois taxpayer. Transferors and sellers shall submit to the
Department of Revenue a notification of any transfer or sale
of tax credits within 30 days after the transfer or sale of
those tax credits. The notification, which shall be in the
form prescribed by the Department, shall include the
transferor's tax credit balance prior to transfer, the credit
certificate number, the identifying number of the EDGE
agreement, the transferor's remaining tax credit balance after
transfer, all tax identification numbers for both transferor
and transferee, the date of transfer, the amount transferred,
a copy of the credit certificate, and any other information
required by the Department of Revenue. The transfer or sale of
the credit does not extend the time in which credit can be
used. The carry forward period for a credit that is

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transferred or sold begins on the date on which the credit was
originally granted by the Department. To the extent the
transferor did not have rights to claim or use the credit at
the time of the transfer or sale, the Department of Revenue
shall either disallow the credit claimed by the transferee or
recapture the credit from the transferee through any
collection method authorized by statute. In such case, the
transferee's recourse is against the transferor.
(e) The Department may award a Taxpayer an increased
credit amount or other benefits within the Agreement if the
Taxpayer demonstrates that, in addition to the investment at
the project location, the Taxpayer plans to make a
non-project-specific capital investment in the furtherance of
community or supply-chain development within the general
surrounding area of the project. In determining the type of
eligible investment allowed under this Section (e), the
Department shall consider the proximity of the non-project
specific investment to the development, the amount and purpose
of the non-project specific investment, and the overall
economic development benefit for the surrounding area.
Non-project specific investments may include, but are not
limited to, partnerships with educational systems, including
school, community college, or university, workforce
development programs, infrastructure and technological
infrastructure investments that serve a greater area than the
project, affordable housing and real estate development,

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health care services, and other purposes as deemed appropriate
by the Department. Non-project-specific investments may also
include contracts that utilize existing business and economic
development projects or support new businesses and economic
development projects in the surrounding area.
(Source: P.A. 102-16, eff. 6-17-21; revised 12-6-21.)
(35 ILCS 10/5-77)
Sec. 5-77. Sunset of new Agreements. The Department shall
not enter into any new Agreements under the provisions of
Section 5-50 of this Act after June 30, 2032 June 30, 2022.
(Source: P.A. 99-925, eff. 1-20-17; 100-511, eff. 9-18-17.)
Section 999. Effective date. This Act takes effect upon
becoming law, except that Sections 1 through 25 take effect on
January 1, 2023.