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2005 Illinois Code - 35 ILCS 10/ Economic Development for a Growing Economy Tax Credit Act. Article 5
(35 ILCS 10/5‑1)
Sec. 5‑1.
Short title.
This Article may be cited as the Economic Development for a Growing Economy Tax Credit Act.
(Source: P.A. 91‑476, eff. 8‑11‑99.)
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(35 ILCS 10/5‑3)
Sec. 5‑3.
Purpose.
The General Assembly finds that the Illinois economy,
although currently strong, is
still highly vulnerable to other states and nations that have major financial
incentive programs for medium‑sized and large firm relocations. Because of the
incentive programs of these
competitor locations, Illinois
must move aggressively with new business development investment tools so that
Illinois is more
competitive in site location decision‑making. The State must not only continue
to work with firms to help
them locate their new plants and facilities in Illinois but also must provide
competitive investment location
tax credits in support of the location and expansion of medium‑sized and large
operations of commerce
and industry. In an increasingly global economy, Illinois' long‑term
development would benefit from
rational, strategic use of State resources in support of business development
and growth.
(Source: P.A. 91‑476, eff. 8‑11‑99.)
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(b) The term "New Employee" does not include:
(1) an employee of the Taxpayer who performs a | ||
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(2) an employee of the Taxpayer who was | ||
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(3) a child, grandchild, parent, or spouse, | ||
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(c) Notwithstanding paragraph (1) of subsection (b), | ||
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(1) treated under the Agreement as a New | ||
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(2) promoted by the Taxpayer to another job.
(d) Notwithstanding subsection (a), the Department | ||
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(1) the Applicant is in receipt of a letter from | ||
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(2) the letter described in paragraph (1) is | ||
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(3) the employee was hired after the date the | ||
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"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.
"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 | ||
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(2) A partnership, estate, or trust and any partner | ||
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(3) A corporation, and any party related to the | ||
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(4) A corporation and any party related to that | ||
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(5) A person to or from whom there is attribution of | ||
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"Taxpayer" means an individual, corporation, partnership, or other entity
that has any Illinois Income Tax liability.
(Source: P.A. 94‑793, eff. 5‑19‑06.)
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(35 ILCS 10/5‑10)
Sec. 5‑10.
Powers of the Department.
The Department, in
addition to those powers
granted under the Civil Administrative Code of Illinois, is granted and shall
have all the powers necessary
or convenient to carry out and effectuate the purposes and provisions of this
Act, including, but not limited
to, power and authority to:
(a) Promulgate procedures, rules, or regulations deemed necessary and
appropriate for the
administration of the programs; establish forms for applications,
notifications, contracts, or any other
agreements; and accept applications at any time during the year.
(b) Provide and assist Taxpayers pursuant to the
provisions of this Act, and
cooperate with Taxpayers that are parties to Agreements
to promote, foster, and
support economic development, capital investment, and job creation or retention
within the State.
(c) Enter into agreements and memoranda of understanding for participation
of and engage in
cooperation with agencies of the federal government, local units of government,
universities, research
foundations or institutions, regional economic development corporations, or
other organizations for the
purposes of this Act.
(d) Gather information and conduct inquiries, in the manner and by the
methods as it deems desirable,
including without limitation, gathering information with respect to
Applicants for the
purpose of making any designations or certifications necessary or desirable or
to gather information to
assist the Committee with any recommendation or guidance in the furtherance of
the purposes of this Act.
(e) Establish, negotiate and effectuate any term, agreement or other
document with any person,
necessary or appropriate to accomplish the purposes of this Act; and to
consent, subject to the provisions
of any Agreement with another party, to the modification or restructuring of
any Agreement to which the
Department is a party.
(f) Fix, determine, charge, and collect any premiums, fees, charges, costs,
and expenses from Applicants,
including, without limitation,
any
application fees,
commitment fees, program fees, financing charges, or publication fees as deemed
appropriate to pay
expenses necessary or incident to the administration, staffing, or operation in
connection with the
Department's or Committee's activities under this Act, or for preparation,
implementation, and
enforcement of the terms of the Agreement, or for consultation, advisory and
legal fees, and other costs;
however, all fees and expenses incident thereto shall be the responsibility of
the Applicant.
(g) Provide for sufficient personnel to permit administration, staffing,
operation, and related support
required to adequately discharge its duties and responsibilities described in
this Act from funds made
available through charges to Applicants
or from funds as
may be appropriated by the General Assembly for the administration of this Act.
(h) Require Applicants, upon written request, to
issue any necessary
authorization to the appropriate federal, state, or local authority for the
release of information concerning a
project being considered under the
provisions of this Act, with the
information requested to include, but not be limited to, financial reports,
returns, or records relating to the
Taxpayers' or its project.
(i) Require that a Taxpayer shall at all times
keep proper books
of record and account in accordance with generally accepted accounting
principles consistently applied,
with the books, records, or papers related to the Agreement in the custody or
control of the Taxpayer open for
reasonable Department inspection and audits, and including, without limitation,
the making of copies of the
books, records, or papers, and the inspection or appraisal of any of the
Taxpayer or project assets.
(j) Take whatever actions are necessary or appropriate to protect the
State's interest in the
event of bankruptcy, default, foreclosure, or noncompliance with the terms and
conditions of financial
assistance or participation required under this Act, including the power to
sell, dispose, lease, or rent, upon
terms and conditions determined by the Director to be appropriate, real or
personal property that the
Department may receive as a result of these actions.
(Source: P.A. 91‑476, eff. 8‑11‑99.)
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(35 ILCS 10/5‑15)
Sec. 5‑15.
Tax Credit Awards.
Subject to the conditions set forth in this
Act, a Taxpayer is
entitled to a Credit against taxes imposed pursuant to subsections (a) and (b)
of Section 201 of the Illinois
Income Tax Act that may be imposed on the Taxpayer for a taxable year beginning
on or
after January 1, 1999,
if the Taxpayer is awarded a Credit by the Department under this Act for that
taxable year.
(a) The Department shall make Credit awards under this Act to foster job
creation and retention in Illinois.
(b) A person that proposes a project to create new jobs in Illinois must
enter into an Agreement with the
Department for the Credit under this Act.
(c) The Credit shall be claimed for the taxable years specified in the
Agreement.
(d) The Credit shall not exceed the Incremental Income Tax attributable to
the project that is the subject of the Agreement.
(Source: P.A. 91‑476, eff. 8‑11‑99.)
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(35 ILCS 10/5‑20)
Sec. 5‑20. Application for a project to create and retain new jobs.
(a) Any Taxpayer proposing a project located or planned to be located in
Illinois may request consideration
for designation of its project, by formal written letter of request or by
formal application to the Department,
in which the Applicant states its intent to make at least a specified level of
investment and
intends to hire or retain a
specified number of full‑time employees at a designated location in Illinois.
As
circumstances require, the
Department may require a formal application from an Applicant and a formal
letter of request for
assistance.
(b) In order to qualify for Credits under this Act, an Applicant's project
must:
(1) involve an investment of at least $5,000,000 in | ||
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(2) involve an investment of at least an amount (to | ||
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(3) if the applicant has 100 or fewer employees, | ||
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(c) After receipt of an application, the Department may enter into an
Agreement with the Applicant if the
application is accepted in accordance with Section 5‑25.
(Source: P.A. 93‑882, eff. 1‑1‑05.)
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(2) The Applicant's project is economically sound | ||
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(3) That, if not for the Credit, the project would | ||
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(4) A cost differential is identified, using best | ||
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(5) The political subdivisions affected by the | ||
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(6) Awarding the Credit will result in an overall | ||
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(7) The Credit is not prohibited by Section 5‑35 of | ||
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(Source: P.A. 94‑793, eff. 5‑19‑06.)
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(35 ILCS 10/5‑30)
Sec. 5‑30.
Limitation to amount of costs of specified items.
The total amount of the Credit allowed during all tax years may not exceed
the aggregate amount of costs incurred by the Taxpayer during all prior tax
years for the following items, to the extent provided in the Agreement:
(1) capital investment, including, but not limited | ||
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(2) infrastructure development;
(3) debt service, except refinancing of current debt;
(4) research and development;
(5) job training and education;
(6) lease costs; or
(7) relocation costs.
(Source: P.A. 91‑476, eff. 8‑11‑99.)
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(35 ILCS 10/5‑35)
Sec. 5‑35.
Relocation of jobs in Illinois.
A taxpayer is not entitled to
claim the credit provided by this Act with respect to any jobs that the
taxpayer
relocates
from one site in Illinois to another site in Illinois.
A taxpayer with respect to a qualifying project certified under the Corporate
Headquarters Relocation Act, however, is not subject to the requirements of
this Section but is nevertheless considered an applicant for purposes of this
Act.
Moreover, any full‑time employee of an eligible business relocated to Illinois
in connection with that qualifying project is
deemed to be a new employee for purposes of this Act.
Determinations under
this Section shall be made by the Department.
(Source: P.A. 91‑476, eff. 8‑11‑99; 92‑207, eff. 8‑1‑01.)
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(35 ILCS 10/5‑40)
Sec. 5‑40.
Determination of Amount of the Credit.
In determining the
amount of the Credit that should be awarded, the Committee shall provide
guidance on, and the
Department shall take into consideration, the
following factors:
(1) The number and location of jobs created and | ||
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(2) The potential impact on the economy of Illinois.
(3) The magnitude of the cost differential between | ||
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(4) The incremental payroll attributable to the | ||
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(5) The capital investment attributable to the | ||
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(6) The amount of the average wage and benefits paid | ||
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(7) The costs to Illinois and the affected political | ||
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(8) The financial assistance that is otherwise | ||
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(Source: P.A. 91‑476, eff. 8‑11‑99.)
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(35 ILCS 10/5‑50)
Sec. 5‑50.
Contents of Agreements with Applicants.
The Department shall
enter into an Agreement with an
Applicant that is awarded a Credit under this Act. The Agreement
must include all of the following:
(1) A detailed description of the project that is | ||
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(2) The duration of the Credit and the first taxable | ||
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(3) The Credit amount that will be allowed for each | ||
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(4) A requirement that the Taxpayer shall maintain | ||
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(5) A specific method for determining the number of | ||
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(6) A requirement that the Taxpayer shall annually | ||
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(7) A requirement that the Director is authorized to | ||
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(8) A requirement that the Taxpayer shall provide | ||
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(9) A detailed description of the number of New | ||
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(10) The minimum investment the business enterprise | ||
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(11) A requirement that the Taxpayer shall provide | ||
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(12) A provision that, if the total number of New | ||
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(13) A detailed description of the items for which | ||
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(14) Any other performance conditions or contract | ||
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(Source: P.A. 91‑476, eff. 8‑11‑99.)
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(35 ILCS 10/5‑55)
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 | ||
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(2) The project has substantially achieved the level | ||
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(3) The project has substantially achieved the level | ||
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(Source: P.A. 91‑476, eff. 8‑11‑99.)
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(35 ILCS 10/5‑60)
Sec. 5‑60.
Pass through entity.
(a) The
shareholders or partners of a Taxpayer that is a Pass Through Entity shall be
entitled to the
Credit allowed under the Agreement.
(b) The Credit provided under subsection (a) is in addition to any
Credit to which a shareholder or partner is
otherwise entitled under a separate Agreement under this Act. A
Pass Through Entity and a shareholder or partner of the Pass Through
Entity may not claim more than one Credit under the same Agreement.
(Source: P.A. 91‑476, eff. 8‑11‑99.)
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(35 ILCS 10/5‑65)
Sec. 5‑65.
Noncompliance; notice; assessment.
If the Director determines
that a Taxpayer who
has received a Credit under this Act is not complying with the
requirements of the Agreement or all of the provisions of
this Act, the Director shall provide notice to the Taxpayer of the alleged
noncompliance, and allow the
Taxpayer a hearing under the provisions of the Illinois Administrative
Procedure Act. If, after
such notice and any hearing, the Director determines that a
noncompliance exists, the Director shall issue to the Department of Revenue
notice to that effect, stating the Noncompliance Date.
(Source: P.A. 91‑476, eff. 8‑11‑99.)
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(35 ILCS 10/5‑70)
Sec. 5‑70.
Annual report.
On or before July 1 each year, the Committee
shall submit a report to the Department on the tax credit program under this
Act to the Governor and the General Assembly. The report shall include
information on the number of
Agreements that were entered into under this Act during the
preceding calendar year, a description of the project that is the
subject of each Agreement, an update on the status of projects under
Agreements entered into before the preceding calendar year, and the
sum of the Credits awarded under this Act. A copy of the report shall
be delivered to the Governor and to each
member of the General Assembly.
(Source: P.A. 91‑476, eff. 8‑11‑99.)
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(35 ILCS 10/5‑75)
Sec. 5‑75.
Evaluation of tax credit program.
On a biennial basis, the
Department shall evaluate the tax
credit program. The evaluation shall include an assessment of the
effectiveness of the program in creating 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 with similar programs. The Director
shall submit a report on the evaluation to the Governor and the General
Assembly after June 30 and before November 1 in each
odd‑numbered year.
(Source: P.A. 91‑476, eff. 8‑11‑99.)
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(35 ILCS 10/5‑80)
Sec. 5‑80.
Adoption of rules.
The Department may adopt rules
necessary to implement this Act. The rules may
provide for recipients of Credits under this Act to be charged
fees to cover administrative costs of the tax credit program. Fees
collected shall be deposited into the Economic Development for a Growing
Economy Fund.
(Source: P.A. 91‑476, eff. 8‑11‑99.)
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(35 ILCS 10/5‑85)
Sec. 5‑85.
The Economic Development for a Growing Economy Fund.
(a) The Economic Development for a Growing
Economy Fund is established to be used exclusively for the purposes of
this Act, including paying for the costs of administering this
Act. The Fund shall be administered by the Department.
(b) The Fund consists of collected fees, appropriations from the
General Assembly, and gifts and grants to the Fund.
(c) The State Treasurer shall invest the money in the Fund not
currently needed to meet the obligations of the Fund in the same manner
as other public funds may be invested. Interest that accrues from these
investments shall be deposited into the Fund.
(d) The money in the Fund at the end of a State fiscal year
remains in the Fund to be used exclusively
for the purposes of this Act. Expenditures from the Fund are
subject to appropriation by the General Assembly.
(Source: P.A. 91‑476, eff. 8‑11‑99.)
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(35 ILCS 10/5‑90)
Sec. 5‑90.
Program Terms and Conditions.
(a) Any documentary materials or data made available or received by any
member of a Committee or
any agent or employee of the Department shall be deemed confidential and shall
not be deemed public
records to the extent that the materials or data consists of trade secrets,
commercial or financial
information regarding the operation of the business conducted by the Applicant
for or recipient of any tax
credit under this Act, or any information regarding the competitive position of
a business in a particular
field of endeavor.
(b) Nothing in this Act shall be construed as creating any rights in any
Applicant
to enter into an Agreement or in any person to challenge the terms of any
Agreement.
(Source: P.A. 91‑476, eff. 8‑11‑99.)
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(35 ILCS 10/5‑105)
Sec. 5‑105.
(Amendatory provisions; text omitted).
(Source: P.A. 91‑476, eff. 8‑11‑99; text omitted.)
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(35 ILCS 10/5‑110)
Sec. 5‑110.
(Amendatory provisions; text omitted).
(Source: P.A. 91‑476, eff. 8‑11‑99; text omitted.)
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(35 ILCS 10/5‑115)
Sec. 5‑115.
(Amendatory provisions; text omitted).
(Source: P.A. 91‑476, eff. 8‑11‑99; text omitted.)
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(35 ILCS 10/5‑120)
Sec. 5‑120.
(Amendatory provisions; text omitted).
(Source: P.A. 91‑476, eff. 8‑11‑99; text omitted.)
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