Public Act 097-1097

SB3619 Enrolled LRB097 18931 HLH 64169 b

AN ACT concerning revenue.

Be it enacted by the People of the State of Illinois,

represented in the General Assembly:

Section 5. The Illinois Income Tax Act is amended by

changing Section 220 as follows:

(35 ILCS 5/220)

Sec. 220. Angel investment credit.

(a) As used in this Section:

"Applicant" means a corporation, partnership, limited

liability company, or a natural person that makes an investment

in a qualified new business venture. The term "applicant" does

not include a corporation, partnership, limited liability

company, or a natural person who has a direct or indirect

ownership interest of at least 51% in the profits, capital, or

value of the investment or a related member.

"Claimant" means an applicant certified by the Department

who files a claim for a credit under this Section.

"Department" means the Department of Commerce and Economic

Opportunity.

"Qualified new business venture" means a business that is

registered with the Department under this Section.

"Related member" means a person that, with respect to the

investment, 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.

(b) For taxable years beginning after December 31, 2010,

and ending on or before December 31, 2016, subject to the

limitations provided in this Section, a claimant may claim, as

a credit against the tax imposed under subsections (a) and (b)

of Section 201 of this Act, an amount equal to 25% of the

claimant's investment made directly in a qualified new business

venture. In order for an investment in a qualified new business

venture to be eligible for tax credits, the business must have

applied for and received certification under subsection (e) for

the taxable year in which the investment was made prior to the

date on which the investment was made. The credit under this

Section may not exceed the taxpayer's Illinois income tax

liability for the taxable year. If the amount of the credit

exceeds the tax liability for the year, the excess may be

carried forward and applied to the tax liability of the 5

taxable years following the excess credit year. The credit

shall be applied to the earliest year for which there is a tax

liability. If there are credits from more than one tax year

that are available to offset a liability, the earlier credit

shall be applied first. In the case of a partnership or

Subchapter S Corporation, the credit is allowed to the partners

or shareholders in accordance with the determination of income

and distributive share of income under Sections 702 and 704 and

Subchapter S of the Internal Revenue Code.

(c) The maximum amount of an applicant's investment that

may be used as the basis for a credit under this Section is

$2,000,000 for each investment made directly in a qualified new

business venture.

(d) The Department shall implement a program to certify an

applicant for an angel investment credit. Upon satisfactory

review, the Department shall issue a tax credit certificate

stating the amount of the tax credit to which the applicant is

entitled. The Department shall annually certify that the

claimant's investment has been made and remains in the

qualified new business venture for no less than 3 years.

If an investment for which a claimant is allowed a credit

under subsection (b) is held by the claimant for less than 3

years, or, if within that period of time the qualified new

business venture is moved from the State of Illinois, the

claimant shall pay to the Department of Revenue, in the manner

prescribed by the Department of Revenue, the amount of the

credit that the claimant received related to the investment.

(e) The Department shall implement a program to register

qualified new business ventures for purposes of this Section. A

business desiring registration shall submit an application to

the Department in each taxable year for which the business

desires registration. The Department may register the business

only if the business satisfies all of the following conditions:

(1) it has its headquarters in this State;

(2) at least 51% of the employees employed by the

business are employed in this State;

(3) it has the potential for increasing jobs in this

State, increasing capital investment in this State, or

both, and either of the following apply:

(A) it is principally engaged in innovation in any

of the following: manufacturing; biotechnology;

nanotechnology; communications; agricultural sciences;

clean energy creation or storage technology;

processing or assembling products, including medical

devices, pharmaceuticals, computer software, computer

hardware, semiconductors, other innovative technology

products, or other products that are produced using

manufacturing methods that are enabled by applying

proprietary technology; or providing services that are

enabled by applying proprietary technology; or

(B) it is undertaking pre-commercialization

activity related to proprietary technology that

includes conducting research, developing a new product

or business process, or developing a service that is

principally reliant on applying proprietary

technology;

(4) it is not principally engaged in real estate

development, insurance, banking, lending, lobbying,

political consulting, professional services provided by

attorneys, accountants, business consultants, physicians,

or health care consultants, wholesale or retail trade,

leisure, hospitality, transportation, or construction,

except construction of power production plants that derive

energy from a renewable energy resource, as defined in

Section 1 of the Illinois Power Agency Act;

(5) at the time it is first certified:

(A) it has fewer than 100 employees;

(B) it has been in operation in Illinois for not

more than 10 consecutive years prior to the year of

certification; and

(C) it has received not more than $10,000,000 in

aggregate private equity investment in cash;

(6) (blank); it has been in operation in Illinois for

not more than 10 consecutive years prior to the year of

certification; and

(7) it has received not more than (i) $10,000,000 in

aggregate private equity investment in cash or (ii)

$4,000,000 in investments that qualified for tax credits

under this Section.

(f) The Department, in consultation with the Department of

Revenue, shall adopt rules to administer this Section. The

aggregate amount of the tax credits that may be claimed under

this Section for investments made in qualified new business

ventures shall be limited at $10,000,000 per calendar year.

(g) A claimant may not sell or otherwise transfer a credit

awarded under this Section to another person.

(h) On or before March 1 of each year, the Department shall

report to the Governor and to the General Assembly on the tax

credit certificates awarded under this Section for the prior

calendar year.

(1) This report must include, for each tax credit

certificate awarded:

(A) the name of the claimant and the amount of

credit awarded or allocated to that claimant;

(B) the name and address of the qualified new

business venture that received the investment giving

rise to the credit and the county in which the

qualified new business venture is located; and

(C) the date of approval by the Department of the

applications for the tax credit certificate.

(2) The report must also include:

(A) the total number of applicants and amount for

tax credit certificates awarded under this Section in

the prior calendar year;

(B) the total number of applications and amount for

which tax credit certificates were issued in the prior

calendar year; and

(C) the total tax credit certificates and amount

authorized under this Section for all calendar years.

(Source: P.A. 96-939, eff. 1-1-11; 97-507, eff. 8-23-11.)

Section 10. The Business Location Efficiency Incentive Act

is amended by adding Section 21 as follows:

(35 ILCS 11/21 new)

Sec. 21. Continuation of Act; validation.

(a) The General Assembly finds and declares that:

(1) Public Act 97-636, which takes effect on June 1,

2012, changed the repeal date set for the Business Location

Efficiency Incentive Act from December 31, 2011 to December

31, 2016.

(2) The Statute on Statutes sets forth general rules on

the repeal of statutes and the construction of multiple

amendments, but Section 1 of that Act also states that

these rules will not be observed when the result would be

"inconsistent with the manifest intent of the General

Assembly or repugnant to the context of the statute".

(3) This amendatory Act of the 97th General Assembly

manifests the intention of the General Assembly to extend

the repeal of the Business Location Efficiency Incentive

Act and have the Business Location Efficiency Incentive Act

continue in effect until December 31, 2016.

(4) The Business Location Efficiency Incentive Act was

originally enacted to protect, promote, and preserve the

general welfare. Any construction of this Act that results

in the repeal of this Act on December 31, 2011 would be

inconsistent with the manifest intent of the General

Assembly and repugnant to the context of the Business

Location Efficiency Incentive Act.

(b) It is hereby declared to have been the intent of the

General Assembly that the Business Location Efficiency

Incentive Act not be subject to repeal on December 31, 2011.

(c) The Business Location Efficiency Incentive Act shall be

deemed to have been in continuous effect since January 1, 2007

(the effective date of Public Act 94-966), and it shall

continue to be in effect henceforward until it is otherwise

lawfully repealed. All previously enacted amendments to the Act

taking effect on or after December 31, 2011, are hereby

validated.

(d) All actions taken in reliance on or pursuant to the

Business Location Efficiency Incentive Act by the Department of

Revenue, the Department of Commerce and Economic Opportunity,

or any other person or entity are hereby validated.

(e) In order to ensure the continuing effectiveness of the

Business Location Efficiency Incentive Act, it is set forth in

full and re-enacted by this amendatory Act of the 97th General

Assembly. This re-enactment is intended as a continuation of

the Act. It is not intended to supersede any amendment to the

Act that is enacted by the 97th General Assembly.

(f) The Business Location Efficiency Incentive Act applies

to all claims, civil actions, and proceedings pending on or

filed on or before the effective date of this Act.

Section 15. The Business Location Efficiency Incentive Act

is re-enacted as follows:

(35 ILCS 11/Act title)

An Act concerning business incentives.

(35 ILCS 11/1)

(Section scheduled to be repealed on December 31, 2011)

Sec. 1. Short title. This Act may be cited as the Business

Location Efficiency Incentive Act.

(Source: P.A. 94-966, eff. 1-1-07.)

(35 ILCS 11/5)

(Section scheduled to be repealed on December 31, 2011)

Sec. 5. Definitions. In this Act:

"Location efficient" means a project that maximizes the use

of existing investments in infrastructure, avoids or minimizes

additional government expenditures for new 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.

"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.

"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.

"Department" means the Department of Commerce and Economic

Opportunity (DCEO) or its successor agency.

"Applicant" means a company or its representative that

negotiates or applies for economic development assistance from

DCEO.

"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).

"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.

(Source: P.A. 94-966, eff. 1-1-07.)

(35 ILCS 11/10)

(Section scheduled to be repealed on December 31, 2011)

Sec. 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) DCEO 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

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 (EDGE), 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.

(Source: P.A. 94-966, eff. 1-1-07.)

(35 ILCS 11/15)

(Section scheduled to be repealed on December 31, 2011)

Sec. 15. Summaries; progress reports.

(a) DCEO 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 set forth in Public Act 93-552.

(b) By June 1, 2008 and by June 1 of each year thereafter

through 2011, 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.

(Source: P.A. 94-966, eff. 1-1-07.)

(35 ILCS 11/20)

(Section scheduled to be repealed on December 31, 2011)

Sec. 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, 2011, 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.

(Source: P.A. 94-966, eff. 1-1-07.)

(35 ILCS 11/25)

(Section scheduled to be repealed on December 31, 2011)

Sec. 25. Repeal. This Act is repealed on December 31, 2016.

(Source: P.A. 97-636, eff. 6-1-12.)

(35 ILCS 11/99)

(Section scheduled to be repealed on December 31, 2011)

Sec. 99. Effective date. This Act takes effect January 1,

2007.

(Source: P.A. 94-966, eff. 1-1-07.)