Bill Text: IL SB1983 | 2021-2022 | 102nd General Assembly | Engrossed

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Bill Title: Reinserts the provisions of the introduced bill with changes. Provides that, to avoid revocation or suspension of credits under the provisions of the bill, the Taxpayer shall also maintain job creation and retention at the level of 85% of the Agreement requirements. Provides that the taxpayer must show a direct and substantial hardship caused by the COVID-19 pandemic (in the introduced bill, a financial hardship). Effective immediately.

Spectrum: Bipartisan Bill

Status: (Engrossed - Dead) 2022-12-22 - Chief Sponsor Changed to Sen. Don Harmon [SB1983 Detail]

Download: Illinois-2021-SB1983-Engrossed.html

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SB1983 Engrossed LRB102 16117 HLH 21492 b
AN ACT concerning revenue.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Corporate Accountability for Tax
Expenditures Act is amended by changing Section 25 as follows:
(20 ILCS 715/25)
Sec. 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

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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) or the utility tax exemption authorized under
Section 9-222.1A of the Public Utilities Act 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 both the State tax
exemption and the utility 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

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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) Except as provided in paragraph (5.1), if 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

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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 5-year period after the beginning of the
first tax year for which the Department issues a tax
credit certificate, 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.
(5.1) For taxable years that begin on or after January
1, 2020 and begin prior to January 1, 2022, credits
awarded under the Economic Development for a Growing
Economy tax credit program shall not be revoked or
suspended as a result of the recipient's failure to meet
the requirements for new or retained employees if that

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failure is due to a direct and substantial hardship caused
by the COVID-19 pandemic and the Taxpayer maintains job
creation and retention at the level of 85% of the
Agreement requirements. For the Department to grant relief
under this paragraph (5.1), proof of a direct and
substantial hardship caused by the COVID-19 pandemic must
be submitted to the Department during the annual
certificate of verification issuance process.
(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 (b), 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.
(b-5) The Department shall post, on its website, (i) the
identity of each recipient from whom amounts were recaptured
under this Section on or after the effective date of this
amendatory Act of the 97th General Assembly, (ii) the date of
the recapture, (iii) a summary of the reasons supporting the

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recapture, and (iv) the amount recaptured from those
recipients.
(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.
(Source: P.A. 97-2, eff. 5-6-11; 97-721, eff. 6-29-12; 98-109,
eff. 7-25-13; 98-463, eff. 8-16-13.)
Section 10. The Economic Development for a Growing Economy
Tax Credit Act is amended by changing Section 5-55 as follows:
(35 ILCS 10/5-55)

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Sec. 5-55. Certificate of verification; submission to the
Department of Revenue. A Taxpayer claiming a Credit under this
Act shall submit to the Department of Revenue a copy of the
Director's certificate of verification under this Act for the
taxable year. However, failure to submit a copy of the
certificate with the Taxpayer's tax return shall not
invalidate a claim for a Credit.
For a Taxpayer to be eligible for a certificate of
verification, the Taxpayer shall provide proof as required by
the Department prior to the end of each calendar year,
including, but not limited to, attestation by the Taxpayer
that:
(1) The project has substantially achieved the level
of new full-time jobs specified in its Agreement.
(2) The project has substantially achieved the level
of annual payroll in Illinois specified in its Agreement.
(3) The project has substantially achieved the level
of capital investment in Illinois specified in its
Agreement.
(4) For taxable years that begin on or after January
1, 2020 and begin prior to January 1, 2022, the Department
shall not find a Taxpayer out of compliance with an
Agreement on the basis of a failure to maintain the job
creation or retention requirements of an Agreement so long
as the level of job creation or retention is maintained at
85% of the Agreement requirements during the modification

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period and the Taxpayer demonstrates to the Department, to
the Department's satisfaction, that the failure to
maintain the contractually required job creation and
retention levels is due to a direct and substantial
hardship caused by the COVID-19 pandemic. The Department
shall require proof of a direct and substantial hardship
caused by the COVID-19 pandemic; that determination shall
be left to the sole and absolute discretion of the
Department.
(Source: P.A. 91-476, eff. 8-11-99.)