SB 3616 — REVENUE-TECH

(b) comprises a minimum of one-half square mile and not more than 12 square miles, or 15 square miles if the zone is located within the jurisdiction of 4 or more counties or municipalities, in total area, exclusive of lakes and waterways;

however, in such cases where the enterprise zone is a joint effort of three or more units of government, or two or more units of government if situated in a township which is divided by a municipality of 1,000,000 or more inhabitants, and where the certification has been in effect at least one year, the total area shall comprise a minimum of one-half square mile and not more than thirteen square miles in total area exclusive of lakes and waterways;

(c) (blank) is a depressed area;

(d) (blank);

satisfies any additional criteria established by regulation of the Department consistent with the purposes of this Act;

and (e) is (1) entirely within a municipality or (2) entirely within the unincorporated areas of a county, except where reasonable need is established for such zone to cover portions of more than one municipality or county or (3) both comprises (i) all or part of a municipality and (ii) an unincorporated area of a county;

and .

(f) meets 3 or more of the following criteria:

(1) all or part of the local labor market area has had SB3616 Enrolled - 5 - LRB097 19794 HLH 65064 b an annual average unemployment rate of at least 120% of the State's annual average unemployment rate for the most recent calendar year or the most recent fiscal year as reported by the Department of Employment Security;

(2) designation will result in the development of substantial employment opportunities by creating or retaining a minimum aggregate of 1,000 full-time equivalent jobs due to an aggregate investment of $100,000,000 or more, and will help alleviate the effects of poverty and unemployment within the local labor market area;

(3) all or part of the local labor market area has a poverty rate of at least 20% according to the latest federal decennial census, 50% or more of children in the local labor market area participate in the federal free lunch program according to reported statistics from the State Board of Education, or 20% or more households in the local labor market area receive food stamps according to the latest federal decennial census;

(4) an abandoned coal mine or a brownfield (as defined in Section 58.2 of the Environmental Protection Act) is located in the proposed zone area, or all or a portion of the proposed zone was declared a federal disaster area in the 3 years preceding the date of application;

(5) the local labor market area contains a presence of large employers that have downsized over the years, the SB3616 Enrolled - 6 - LRB097 19794 HLH 65064 b labor market area has experienced plant closures in the 5 years prior to the date of application affecting more than 50 workers, or the local labor market area has experienced State or federal facility closures in the 5 years prior to the date of application affecting more than 50 workers;

(6) based on data from Multiple Listing Service information or other suitable sources, the local labor market area contains a high floor vacancy rate of industrial or commercial properties, vacant or demolished commercial and industrial structures are prevalent in the local labor market area, or industrial structures in the local labor market area are not used because of age, deterioration, relocation of the former occupants, or cessation of operation;

(7) the applicant demonstrates a substantial plan for using the designation to improve the State and local government tax base, including income, sales, and property taxes;

(8) significant public infrastructure is present in the local labor market area in addition to a plan for infrastructure development and improvement;

(9) high schools or community colleges located within the local labor market area are engaged in ACT Work Keys, Manufacturing Skills Standard Certification, or other industry-based credentials that prepare students for careers;

or SB3616 Enrolled - 7 - LRB097 19794 HLH 65064 b (10) the change in equalized assessed valuation of industrial and/or commercial properties in the 5 years prior to the date of application is equal to or less than 50% of the State average change in equalized assessed valuation for industrial and/or commercial properties, as applicable, for the same period of time.

As provided in Section 10-5.3 of the River Edge Redevelopment Zone Act, upon the expiration of the term of each River Edge Redevelopment Zone in existence on the effective date of this amendatory Act of the 97th General Assembly, that River Edge Redevelopment Zone will become available for its previous designee or a new applicant to compete for designation as an enterprise zone.

No preference for designation will be given to the previous designee of the zone.

(2) Any criteria established by the Department or by law which utilize the rate of unemployment for a particular area shall provide that all persons who are not presently employed and have exhausted all unemployment benefits shall be considered unemployed, whether or not such persons are actively seeking employment.

(Source:

P.A.

86-803.) (20 ILCS 655/4.1 new) Sec.

4.1.

Department recommendations.

(a) For all applications that qualify under Section 4 of this Act, the Department shall issue recommendations by SB3616 Enrolled - 8 - LRB097 19794 HLH 65064 b assigning a score to each applicant.

The scores will be determined by the Department, based on the extent to which an applicant meets the criteria points under subsection (f) of Section 4 of this Act.

Scores will be determined using the following scoring system:

(1) Up to 50 points for the extent to which the applicant meets the criteria in item (1) of subsection (f) of Section 4 of this Act.

(2) Up to 50 points for the extent to which the applicant meets the criteria in item (2) of subsection (f) of Section 4 of this Act.

(3) Up to 40 points for the extent to which the applicant meets the criteria in item (3) of subsection (f) of Section 4 of this Act.

(4) Up to 30 points for the extent to which the applicant meets the criteria in item (4) of subsection (f) of Section 4 of this Act.

(5) Up to 50 points for the extent to which the applicant meets the criteria in item (5) of subsection (f) of Section 4 of this Act.

(6) Up to 40 points for the extent to which the applicant meets the criteria in item (6) of subsection (f) of Section 4 of this Act.

(7) Up to 30 points for the extent to which the applicant meets the criteria in item (7) of subsection (f) of Section 4 of this Act.

SB3616 Enrolled - 9 - LRB097 19794 HLH 65064 b (8) Up to 50 points for the extent to which the applicant meets the criteria in item (8) of subsection (f) of Section 4 of this Act.

(9) Up to 40 points for the extent to which the applicant meets the criteria in item (9) of subsection (f) of Section 4 of this Act.

(10) Up to 40 points for the extent to which the applicant meets the criteria in item (10) of subsection (f) of Section 4 of this Act.

(b) After assigning a score for each of the individual criteria using the point system as described in subsection (a), the Department shall then take the sum of the scores for each applicant and assign a final score.

The Department shall then submit this information to the Board, as required in subsection (c) of Section 5.2, as its recommendation.

(20 ILCS 655/5.2) (from Ch.

67 1/2, par.

607) Sec.

5.2.

Department Review of Enterprise Zone Applications.

(a) All applications which are to be considered and acted upon by the Department during a calendar year must be received by the Department no later than December 31 of the preceding calendar year.

Any application received on or after December 31 January 1 of any calendar year shall be held by the Department for consideration and action during the following calendar year.

SB3616 Enrolled - 10 - LRB097 19794 HLH 65064 b Each enterprise zone application shall include a specific definition of the applicant's local labor market area.

(a-5) The Department shall, no later than March 31, 2013, develop an application process for an enterprise zone application.

The Department has emergency rulemaking authority for the purpose of application development only until 9 months after the effective date of this amendatory Act of the 97th General Assembly.

(b) Upon receipt of an application from a county or municipality the Department shall review the application to determine whether the designated area qualifies as an enterprise zone under Section 4 of this Act.

(c) No later than June 30 May 1, the Department shall notify all applicant municipalities and counties of the Department's determination of the qualification of their respective designated enterprise zone areas, and shall send qualifying applications, including the applicant's scores for items (1) through (10) of subsection (a) of Section 4.1 and the applicant's final score under that Section, to the Board.

(d) If any such designated area is found to be qualified to be an enterprise zone by the Department under subsection (c) of this Section, the Department shall, no later than July 15 May 15, send a letter of notification to each member of the General Assembly whose legislative district or representative district contains all or part of the designated area and publish a notice in at least one newspaper of general circulation within SB3616 Enrolled - 11 - LRB097 19794 HLH 65064 b the proposed zone area to notify the general public of the application and their opportunity to comment.

Such notice shall include a description of the area and a brief summary of the application and shall indicate locations where the applicant has provided copies of the application for public inspection.

The notice shall also indicate appropriate procedures for the filing of written comments from zone residents, business, civic and other organizations and property owners to the Department.

(e) (Blank).

By July 1 of each calendar year, the Department shall either approve or deny all applications filed by December 31 of the preceding calendar year.

If approval of an application filed by December 31 of any calendar year is not received by July 1 of the following calendar year, the application shall be considered denied.

If an application is denied, the Department shall inform the county or municipality of the specific reasons for the denial.

(f) (Blank).

Preference in Designation.

In determining which designated areas shall be approved and certified as Enterprise Zones, the Department shall give preference to:

(1) Areas with high levels of poverty, unemployment, job and population loss, and general distress;

and (2) Areas which have evidenced with widest support from the county or municipality seeking to have such areas designated as Enterprise Zones, community residents, local business, labor and neighborhood organizations and where there are plans for the disposal of publicly owned real property as described in SB3616 Enrolled - 12 - LRB097 19794 HLH 65064 b Section 10;

and (3) Areas for which a specific plan has been submitted to effect economic growth and expansion and neighborhood revitalization for the benefit of Zone residents and existing business through efforts which may include but need not be limited to a reduction of tax rates or fees, an increase in the level and efficiency of local services, and a simplification or streamlining of governmental requirements applicable to employers or employees, taking into account the resources available to the county or municipality seeking to have an area designated as an Enterprise Zone to make such efforts;

and (4) Areas for which there is evidence of prior consultation between the county or municipality seeking designation of an area as an Enterprise Zone and business, labor and neighborhood organizations within the proposed Zone;

(5) Areas for which a specific plan has been submitted which will or may be expected to benefit zone residents and workers by increasing their ownership opportunities and participation in enterprise zone development;

(6) Areas in which specific governmental functions are to be performed by designated neighborhood organizations in partnership with the county or municipality seeking designation of an area as an Enterprise Zone.

(g) (Blank).

At least 2/5 of all new enterprise zones approved and certified by the Department during any calendar year shall be located wholly or partially within counties with SB3616 Enrolled - 13 - LRB097 19794 HLH 65064 b unemployment rates of or above 8% for at least one month during the 12-month calendar year preceding the calendar year in which the applications are to be considered and acted upon by the Department.

(h) (Blank).

The Department's determination of whether to certify an enterprise zone shall be based on the purposes of this Act, the criteria set forth in Section 4 and subsections (f) and (g) of Section 5.2, and any additional criteria adopted by regulation of the Department under paragraph (d) of Section 4.

(Source:

P.A.

85-870.) (20 ILCS 655/5.2.1 new) Sec.

5.2.1.

Enterprise Zone Board.

(a) An Enterprise Zone Board is hereby created within the Department.

(b) The Board shall consist of the following 5 members:

(1) the Director of Commerce and Economic Opportunity, or his or her designee, who shall serve as chairperson;

(2) the Director of Revenue, or his or her designee;

and (3) three members appointed by the Governor, with the advice and consent of the Senate.

Board members shall serve without compensation but may be reimbursed for necessary expenses incurred in the performance of their duties.

SB3616 Enrolled - 14 - LRB097 19794 HLH 65064 b (c) Each member appointed under item (3) of subsection (b) shall have at least 5 years of experience in business, economic development, or site location.

Of the members appointed under item (3) of subsection (b):

one member shall reside in Cook County;

one member shall reside in DuPage, Kane, Lake, McHenry, or Will County;

and one member shall reside in a county other than Cook, DuPage, Kane, Lake, McHenry, or Will.

(d) Of the initial members appointed under item (3) of subsection (b):

one member shall serve for a term of 2 years;

one member shall serve for a term of 3 years;

and one member shall serve for a term of 4 years.

Thereafter, all members appointed under item (3) of subsection (b) shall serve for terms of 4 years.

Members appointed under item (3) of subsection (b) may be reappointed.

The Governor may remove a member appointed under item (3) of subsection (b) for incompetence, neglect of duty, or malfeasance in office.

(e) By September 30, 2014, and September 30 of each year thereafter, all applications filed by December 31 of the preceding calendar year and deemed qualified by the Department shall be approved or denied by the Board.

If such application is not approved by September 30, the application shall be considered denied.

If an application is denied, the Board shall inform the applicant of the specific reasons for the denial.

(f) A majority of the Board will determine whether an application is approved or denied.

The Board is not, at any time, required to designate an enterprise zone.

SB3616 Enrolled - 15 - LRB097 19794 HLH 65064 b (g) In determining which designated areas shall be approved and certified as enterprise zones, the Board shall give preference to the extent to which the area meets the criteria set forth in Section 4.

(20 ILCS 655/5.3) (from Ch.

67 1/2, par.

608) Sec.

5.3.

Certification of Enterprise Zones;

Effective date.

(a) Certification of Board-approved Approval of designated Enterprise Zones shall be made by the Department by certification of the designating ordinance.

The Department shall promptly issue a certificate for each Enterprise Zone upon its approval by the Board.

The certificate shall be signed by the Director of the Department, shall make specific reference to the designating ordinance, which shall be attached thereto, and shall be filed in the office of the Secretary of State.

A certified copy of the Enterprise Zone Certificate, or a duplicate original thereof, shall be recorded in the office of recorder of deeds of the county in which the Enterprise Zone lies.

(b) An Enterprise Zone shall be effective on January 1 of the first calendar year after Department upon its certification.

The Department shall transmit a copy of the certification to the Department of Revenue, and to the designating municipality or county.

Upon certification of an Enterprise Zone, the terms and SB3616 Enrolled - 16 - LRB097 19794 HLH 65064 b provisions of the designating ordinance shall be in effect, and may not be amended or repealed except in accordance with Section 5.4.

(c) With the exception of Enterprise Zones scheduled to expire before December 31, 2018, an An Enterprise Zone designated before the effective date of this amendatory Act of the 97th General Assembly shall be in effect for 30 calendar years, or for a lesser number of years specified in the certified designating ordinance.

Each Enterprise Zone in existence on the effective date of this amendatory Act of the 97th General Assembly that is scheduled to expire before July 1, 2016 will have its termination date extended until July 1, 2016.

An Enterprise Zone designated on or after the effective date of this amendatory Act of the 97th General Assembly shall be in effect for a term of 15 calendar years, or for a lesser number of years specified in the certified designating ordinance.

An enterprise zone designated on or after the effective date of this amendatory Act of the 97th General Assembly shall be subject to review by the Board after 13 years for an additional 10-year designation.

Enterprise Zones shall terminate at midnight of December 31 of the final calendar year of the certified term, except as provided in Section 5.4.

(d) No more than 12 Enterprise Zones may be certified by the Department in calendar year 1984, no more than 12 Enterprise Zones may be certified by the Department in calendar year 1985, no more than 13 Enterprise Zones may be certified by SB3616 Enrolled - 17 - LRB097 19794 HLH 65064 b the Department in calendar year 1986, no more than 15 Enterprise Zones may be certified by the Department in calendar year 1987, and no more than 20 Enterprise Zones may be certified by the Department in calendar year 1990.

In other calendar years, no more than 13 Enterprise Zones may be certified by the Department.

The Department may also designate up to 8 additional Enterprise Zones outside the regular application cycle if warranted by the extreme economic circumstances as determined by the Department.

The Department may also designate one additional Enterprise Zone outside the regular application cycle if an aircraft manufacturer agrees to locate an aircraft manufacturing facility in the proposed Enterprise Zone.

Notwithstanding any other provision of this Act, no more than 89 Enterprise Zones may be certified by the Department for the 10 calendar years commencing with 1983.

The 7 additional Enterprise Zones authorized by Public Act 86-15 shall not lie within municipalities or unincorporated areas of counties that abut or are contiguous to Enterprise Zones certified pursuant to this Section prior to June 30, 1989.

The 7 additional Enterprise Zones (excluding the additional Enterprise Zone which may be designated outside the regular application cycle) authorized by Public Act 86-1030 shall not lie within municipalities or unincorporated areas of counties that abut or are contiguous to Enterprise Zones certified pursuant to this Section prior to February 28, 1990.

Beginning in calendar year 2004 and until December 31, 2008, one SB3616 Enrolled - 18 - LRB097 19794 HLH 65064 b additional enterprise zone may be certified by the Department.

In any calendar year, the Department may not certify more than 3 Zones located within the same municipality.

The Department may certify Enterprise Zones in each of the 10 calendar years commencing with 1983.

The Department may not certify more than a total of 18 Enterprise Zones located within the same county (whether within municipalities or within unincorporated territory) for the 10 calendar years commencing with 1983.

Thereafter, the Department may not certify any additional Enterprise Zones, but may amend and rescind certifications of existing Enterprise Zones in accordance with Section 5.4.

(e) Notwithstanding any other provision of law, if (i) the county board of any county in which a current military base is located, in part or in whole, or in which a military base that has been closed within 20 years of the effective date of this amendatory Act of 1998 is located, in part or in whole, adopts a designating ordinance in accordance with Section 5 of this Act to designate the military base in that county as an enterprise zone and (ii) the property otherwise meets the qualifications for an enterprise zone as prescribed in Section 4 of this Act, then the Department may certify the designating ordinance or ordinances, as the case may be.

(f) Applications for Enterprise Zones that are scheduled to expire in 2016, 2017, or 2018, including Enterprise Zones that have been extended until 2016 by this amendatory Act of the 97th General Assembly, shall be submitted to the Department no SB3616 Enrolled - 19 - LRB097 19794 HLH 65064 b later than the date established by the Department by rule pursuant to Section 5.2.

At that time, the Zone becomes available for either the previously designated area or a different area to compete for designation.

No preference for designation as a Zone will be given to the previously designated area.

For Enterprise Zones that are scheduled to expire on or after January 1, 2019, an application process shall begin 2 years prior to the year in which the Zone expires.

At that time, the Zone becomes available for either the previously designated area or a different area to compete for designation.

No preference for designation as a Zone will be given to the previously designated area.

Each Enterprise Zone that reapplies for certification but does not receive a new certification shall expire on its scheduled termination date.

(Source:

P.A.

92-16, eff.

6-28-01;

92-777, eff.

1-1-03;

93-436, eff.

1-1-04.) (20 ILCS 655/5.5) (from Ch.

67 1/2, par.

609.1) Sec.

5.5.

High Impact Business.

(a) In order to respond to unique opportunities to assist in the encouragement, development, growth and expansion of the private sector through large scale investment and development projects, the Department is authorized to receive and approve applications for the designation of "High Impact Businesses" in SB3616 Enrolled - 20 - LRB097 19794 HLH 65064 b Illinois subject to the following conditions:

(1) such applications may be submitted at any time during the year;

(2) such business is not located, at the time of designation, in an enterprise zone designated pursuant to this Act;

(3) the business intends to do one or more of the following:

(A) the business intends to make a minimum investment of $12,000,000 which will be placed in service in qualified property and intends to create 500 full-time equivalent jobs at a designated location in Illinois or intends to make a minimum investment of $30,000,000 which will be placed in service in qualified property and intends to retain 1,500 full-time retained jobs at a designated location in Illinois.

The business must certify in writing that the investments would not be placed in service in qualified property and the job creation or job retention would not occur without the tax credits and exemptions set forth in subsection (b) of this Section.

The terms "placed in service" and "qualified property" have the same meanings as described in subsection (h) of Section 201 of the Illinois Income Tax Act;

or (B) the business intends to establish a new electric generating facility at a designated location SB3616 Enrolled - 21 - LRB097 19794 HLH 65064 b in Illinois.

"New electric generating facility", for purposes of this Section, means a newly-constructed electric generation plant or a newly-constructed generation capacity expansion at an existing electric generation plant, including the transmission lines and associated equipment that transfers electricity from points of supply to points of delivery, and for which such new foundation construction commenced not sooner than July 1, 2001.

Such facility shall be designed to provide baseload electric generation and shall operate on a continuous basis throughout the year;

and (i) shall have an aggregate rated generating capacity of at least 1,000 megawatts for all new units at one site if it uses natural gas as its primary fuel and foundation construction of the facility is commenced on or before December 31, 2004, or shall have an aggregate rated generating capacity of at least 400 megawatts for all new units at one site if it uses coal or gases derived from coal as its primary fuel and shall support the creation of at least 150 new Illinois coal mining jobs, or (ii) shall be funded through a federal Department of Energy grant before December 31, 2010 and shall support the creation of Illinois coal-mining jobs, or (iii) shall use coal gasification or integrated gasification-combined cycle units that generate electricity or chemicals, or both, and shall support SB3616 Enrolled - 22 - LRB097 19794 HLH 65064 b the creation of Illinois coal-mining jobs.

The business must certify in writing that the investments necessary to establish a new electric generating facility would not be placed in service and the job creation in the case of a coal-fueled plant would not occur without the tax credits and exemptions set forth in subsection (b-5) of this Section.

The term "placed in service" has the same meaning as described in subsection (h) of Section 201 of the Illinois Income Tax Act;

or (B-5) the business intends to establish a new gasification facility at a designated location in Illinois.

As used in this Section, "new gasification facility" means a newly constructed coal gasification facility that generates chemical feedstocks or transportation fuels derived from coal (which may include, but are not limited to, methane, methanol, and nitrogen fertilizer), that supports the creation or retention of Illinois coal-mining jobs, and that qualifies for financial assistance from the Department before December 31, 2010.

A new gasification facility does not include a pilot project located within Jefferson County or within a county adjacent to Jefferson County for synthetic natural gas from coal;

or (C) the business intends to establish production SB3616 Enrolled - 23 - LRB097 19794 HLH 65064 b operations at a new coal mine, re-establish production operations at a closed coal mine, or expand production at an existing coal mine at a designated location in Illinois not sooner than July 1, 2001;

provided that the production operations result in the creation of 150 new Illinois coal mining jobs as described in subdivision (a)(3)(B) of this Section, and further provided that the coal extracted from such mine is utilized as the predominant source for a new electric generating facility.

The business must certify in writing that the investments necessary to establish a new, expanded, or reopened coal mine would not be placed in service and the job creation would not occur without the tax credits and exemptions set forth in subsection (b-5) of this Section.

The term "placed in service" has the same meaning as described in subsection (h) of Section 201 of the Illinois Income Tax Act;

or (D) the business intends to construct new transmission facilities or upgrade existing transmission facilities at designated locations in Illinois, for which construction commenced not sooner than July 1, 2001.

For the purposes of this Section, "transmission facilities" means transmission lines with a voltage rating of 115 kilovolts or above, including associated equipment, that transfer SB3616 Enrolled - 24 - LRB097 19794 HLH 65064 b electricity from points of supply to points of delivery and that transmit a majority of the electricity generated by a new electric generating facility designated as a High Impact Business in accordance with this Section.

The business must certify in writing that the investments necessary to construct new transmission facilities or upgrade existing transmission facilities would not be placed in service without the tax credits and exemptions set forth in subsection (b-5) of this Section.

The term "placed in service" has the same meaning as described in subsection (h) of Section 201 of the Illinois Income Tax Act;

or (E) the business intends to establish a new wind power facility at a designated location in Illinois.

For purposes of this Section, "new wind power facility" means a newly constructed electric generation facility, or a newly constructed expansion of an existing electric generation facility, placed in service on or after July 1, 2009, that generates electricity using wind energy devices, and such facility shall be deemed to include all associated transmission lines, substations, and other equipment related to the generation of electricity from wind energy devices.

For purposes of this Section, "wind energy device" means any device, with a nameplate SB3616 Enrolled - 25 - LRB097 19794 HLH 65064 b capacity of at least 0.5 megawatts, that is used in the process of converting kinetic energy from the wind to generate electricity;

and (4) no later than 90 days after an application is submitted, the Department shall notify the applicant of the Department's determination of the qualification of the proposed High Impact Business under this Section.

(b) Businesses designated as High Impact Businesses pursuant to subdivision (a)(3)(A) of this Section shall qualify for the credits and exemptions described in the following Acts:

Section 9-222 and Section 9-222.1A of the Public Utilities Act, subsection (h) of Section 201 of the Illinois Income Tax Act, and Section 1d of the Retailers' Occupation Tax Act;

provided that these credits and exemptions described in these Acts shall not be authorized until the minimum investments set forth in subdivision (a)(3)(A) of this Section have been placed in service in qualified properties and, in the case of the exemptions described in the Public Utilities Act and Section 1d of the Retailers' Occupation Tax Act, the minimum full-time equivalent jobs or full-time retained jobs set forth in subdivision (a)(3)(A) of this Section have been created or retained.

Businesses designated as High Impact Businesses under this Section shall also qualify for the exemption described in Section 5l of the Retailers' Occupation Tax Act.

The credit provided in subsection (h) of Section 201 of the Illinois Income Tax Act shall be applicable to investments in SB3616 Enrolled - 26 - LRB097 19794 HLH 65064 b qualified property as set forth in subdivision (a)(3)(A) of this Section.

(b-5) Businesses designated as High Impact Businesses pursuant to subdivisions (a)(3)(B), (a)(3)(B-5), (a)(3)(C), and (a)(3)(D) of this Section shall qualify for the credits and exemptions described in the following Acts:

Section 51 of the Retailers' Occupation Tax Act, Section 9-222 and Section 9-222.1A of the Public Utilities Act, and subsection (h) of Section 201 of the Illinois Income Tax Act;

however, the credits and exemptions authorized under Section 9-222 and Section 9-222.1A of the Public Utilities Act, and subsection (h) of Section 201 of the Illinois Income Tax Act shall not be authorized until the new electric generating facility, the new gasification facility, the new transmission facility, or the new, expanded, or reopened coal mine is operational, except that a new electric generating facility whose primary fuel source is natural gas is eligible only for the exemption under Section 5l of the Retailers' Occupation Tax Act.

(b-6) Businesses designated as High Impact Businesses pursuant to subdivision (a)(3)(E) of this Section shall qualify for the exemptions described in Section 5l of the Retailers' Occupation Tax Act;

any business so designated as a High Impact Business being, for purposes of this Section, a "Wind Energy Business".

(c) High Impact Businesses located in federally designated foreign trade zones or sub-zones are also eligible for SB3616 Enrolled - 27 - LRB097 19794 HLH 65064 b additional credits, exemptions and deductions as described in the following Acts:

Section 9-221 and Section 9-222.1 of the Public Utilities Act;

and subsection (g) of Section 201, and Section 203 of the Illinois Income Tax Act.

(d) Except for businesses contemplated under subdivision (a)(3)(E) of this Section, existing Illinois businesses which apply for designation as a High Impact Business must provide the Department with the prospective plan for which 1,500 full-time retained jobs would be eliminated in the event that the business is not designated.

(e) Except for new wind power facilities contemplated under subdivision (a)(3)(E) of this Section, new proposed facilities which apply for designation as High Impact Business must provide the Department with proof of alternative non-Illinois sites which would receive the proposed investment and job creation in the event that the business is not designated as a High Impact Business.

(f) Except for businesses contemplated under subdivision (a)(3)(E) of this Section, in the event that a business is designated a High Impact Business and it is later determined after reasonable notice and an opportunity for a hearing as provided under the Illinois Administrative Procedure Act, that the business would have placed in service in qualified property the investments and created or retained the requisite number of jobs without the benefits of the High Impact Business designation, the Department shall be required to immediately SB3616 Enrolled - 28 - LRB097 19794 HLH 65064 b revoke the designation and notify the Director of the Department of Revenue who shall begin proceedings to recover all wrongfully exempted State taxes with interest.

The business shall also be ineligible for all State funded Department programs for a period of 10 years.

(g) The Department shall revoke a High Impact Business designation if the participating business fails to comply with the terms and conditions of the designation.

However, the penalties for new wind power facilities or Wind Energy Businesses for failure to comply with any of the terms or conditions of the Illinois Prevailing Wage Act shall be only those penalties identified in the Illinois Prevailing Wage Act, and the Department shall not revoke a High Impact Business designation as a result of the failure to comply with any of the terms or conditions of the Illinois Prevailing Wage Act in relation to a new wind power facility or a Wind Energy Business.

(h) Prior to designating a business, the Department shall provide the members of the General Assembly and Commission on Government Forecasting and Accountability with a report setting forth the terms and conditions of the designation and guarantees that have been received by the Department in relation to the proposed business being designated.

(Source:

P.A.

95-18, eff.

7-30-07;

96-28, eff.

7-1-09.) (20 ILCS 655/6) (from Ch.

67 1/2, par.

610) SB3616 Enrolled - 29 - LRB097 19794 HLH 65064 b Sec.

6.

Powers and Duties of Department.

(A) General Powers.

The Department shall administer this Act and shall have the following powers and duties:

(1) To monitor the implementation of this Act and submit reports evaluating the effectiveness of the program and any suggestions for legislation to the Governor and General Assembly by October 1 of every year preceding a regular Session of the General Assembly and to annually report to the General Assembly initial and current population, employment, per capita income, number of business establishments, and dollar value of new construction and improvements, and the aggregate value of each tax incentive, based on information provided by the Department of Revenue, for each Enterprise Zone.

(2) To promulgate all necessary rules and regulations to carry out the purposes of this Act in accordance with The Illinois Administrative Procedure Act.

(3) To assist municipalities and counties in obtaining Federal status as an Enterprise Zone.

(B) Specific Duties:

(1) The Department shall provide information and appropriate assistance to persons desiring to locate and engage in business in an enterprise zone, to persons engaged in business in an enterprise zone and to designated zone organizations operating there.

(2) The Department shall, in cooperation with SB3616 Enrolled - 30 - LRB097 19794 HLH 65064 b appropriate units of local government and State agencies, coordinate and streamline existing State business assistance programs and permit and license application procedures for Enterprise Zone businesses.

(3) The Department shall publicize existing tax incentives and economic development programs within the Zone and upon request, offer technical assistance in abatement and alternative revenue source development to local units of government which have enterprise Zones within their jurisdiction.

(4) The Department shall work together with the responsible State and Federal agencies to promote the coordination of other relevant programs, including but not limited to housing, community and economic development, small business, banking, financial assistance, and employment training programs which are carried on in an Enterprise Zone.

(5) In order to stimulate employment opportunities for Zone residents, the Department, in cooperation with the Department of Human Services and the Department of Employment Security, is to initiate a test of the following 2 programs within the 12 month period following designation and approval by the Department of the first enterprise zones:

(i) the use of aid to families with dependent children benefits payable under Article IV of the Illinois Public Aid Code, General Assistance benefits payable under SB3616 Enrolled - 31 - LRB097 19794 HLH 65064 b Article VI of the Illinois Public Aid Code, the unemployment insurance benefits payable under the Unemployment Insurance Act as training or employment subsidies leading to unsubsidized employment;

and (ii) a program for voucher reimbursement of the cost of training zone residents eligible under the Targeted Jobs Tax Credit provisions of the Internal Revenue Code for employment in private industry.

These programs shall not be designed to subsidize businesses, but are intended to open up job and training opportunities not otherwise available.

Nothing in this paragraph (5) shall be deemed to require zone businesses to utilize these programs.

These programs should be designed (i) for those individuals whose opportunities for job-finding are minimal without program participation, (ii) to minimize the period of benefit collection by such individuals, and (iii) to accelerate the transition of those individuals to unsubsidized employment.

The Department is to seek agreement with business, organized labor and the appropriate State Department and agencies on the design, operation and evaluation of the test programs.

A report with recommendations including representative comments of these groups shall be submitted by the Department to the county or municipality which designated the area as an Enterprise Zone, Governor and General Assembly not later than 12 months after such test programs have commenced, or not later SB3616 Enrolled - 32 - LRB097 19794 HLH 65064 b than 3 months following the termination of such test programs, whichever first occurs.

(Source:

P.A.

89-507, eff.

7-1-97.) (20 ILCS 655/8.1 new) Sec.

8.1.

Accounting.

(a) Any business receiving tax incentives due to its location within an Enterprise Zone or its designation as a High Impact Business must report the total Enterprise Zone or High Impact Business tax benefits received by the business, broken down by incentive category and enterprise zone, if applicable, annually to the Department of Revenue.

Reports will be due no later than March 30 of each year and shall cover the previous calendar year.

The first report will be for the 2012 calendar year and will be due no later than March 30, 2013.

Failure to report data shall result in ineligibility to receive incentives.

For the first offense, a business shall be given 60 days to comply.

(b) Each person required to file a return under the Gas Revenue Tax Act, the Gas Use Tax Act, the Electricity Excise Tax Act, or the Telecommunications Excise Tax Act shall file, on or before March 30 of each year, a report with the Department of Revenue, in the manner and form required by the Department of Revenue, itemizing the amount of the deduction taken under each Act, respectively, due to the location of a business in an Enterprise Zone or its designation as a High SB3616 Enrolled - 33 - LRB097 19794 HLH 65064 b Impact Business.

The report shall be itemized by business and the business location address.

(c) Employers shall report their job creation, retention, and capital investment numbers within the zone annually to the administrator, which will compile the information and report it to the Department of Revenue no later than March 30 of each calendar year.

High Impact Businesses shall report their job creation, retention, and capital investment numbers directly to the Department of Revenue no later than March 30 of each year.

(d) The Department of Revenue will aggregate and collect the tax, job, and capital investment data by Enterprise Zone and High Impact Business and report this information, formatted to exclude company-specific proprietary information, to the Department by May 1, 2013, and by May 1 of every calendar year thereafter.

The Department will include this information in their required reports under Section 6 of this Act.

(e) The Department of Revenue, in its discretion, may require that the reports filed under this Section be submitted electronically.

(f) The Department of Revenue shall have the authority to adopt rules as are reasonable and necessary to implement the provisions of this Section.

(20 ILCS 655/8.2 new) Sec.

8.2.

Zone Administrator.

SB3616 Enrolled - 34 - LRB097 19794 HLH 65064 b (a) Each Zone Administrator designated under Section 8 of this Act shall post a copy of the boundaries of the Enterprise Zone on its official Internet website and shall provide an electronic copy to the Department.

The Department shall post each copy of the boundaries of an Enterprise Zone that it receives from a Zone Administrator on its official Internet website.

(b) The Zone Administrator shall collect and aggregate the following information:

(1) the estimated cost of each building project, broken down into labor and materials;

and (2) within 60 days after the end of the project, the estimated cost of each building project, broken down into labor and materials.

(c) By April 1 of each year, each Zone Administrator shall file a copy of its fee schedule with the Department, and the Department shall review and approve the fee schedule.

Zone Administrators shall charge no more than 0.5% of the cost of building materials of the project associated with the specific Enterprise Zone, with a maximum fee of no more than $50,000.

Section 10.

The Illinois Income Tax Act is amended by changing Sections 201 and 203 as follows:

(35 ILCS 5/201) (from Ch.

453)2-201) Sec.(Text of Section before amendment by P.A.

14.97-636) SB3616 Enrolled - 35 - LRB097 19794 HLH 65064 b Sec.

This201. Act shall be known as the the "Retailers' Occupation Tax Act" and the tax herein imposed shall be in addition to all other occupation or privilege taxes imposed by the State of Illinois or by any municipal corporation or political subdivision thereof.

Tax Imposed.

(a) In general.

A tax measured by net income is hereby imposed on every individual, corporation, trust and estate for each taxable year ending after July 31, 1969 on the privilege of earning or receiving income in or as a resident of this State.

Such tax shall be in addition to all other occupation or privilege taxes imposed by this State or by any municipal corporation or political subdivision thereof.

(b) Rates.

The tax imposed by subsection (a) of this Section shall be determined as follows, except as adjusted by subsection (d-1):

(1) In the case of an individual, trust or estate, for taxable years ending prior to July 1, 1989, an amount equal to 2 1/2% of the taxpayer's net income for the taxable year.

(2) In the case of an individual, trust or estate, for taxable years beginning prior to July 1, 1989 and ending after June 30, 1989, an amount equal to the sum of (i) 2 1/2% of the taxpayer's net income for the period prior to July 1, 1989, as calculated under Section 202.3, and (ii) 3% of the taxpayer's net income for the period after June 30, 1989, as calculated under Section 202.3.

(3) In the case of an individual, trust or estate, for taxable years beginning after June 30, 1989, and ending prior to January 1, 2011, an amount equal to 3% of the taxpayer's net income for the taxable year.

SB3616 Enrolled - 36 - LRB097 19794 HLH 65064 b (4) In the case of an individual, trust, or estate, for taxable years beginning prior to January 1, 2011, and ending after December 31, 2010, an amount equal to the sum of (i) 3% of the taxpayer's net income for the period prior to January 1, 2011, as calculated under Section 202.5, and (ii) 5% of the taxpayer's net income for the period after December 31, 2010, as calculated under Section 202.5.

(5) In the case of an individual, trust, or estate, for taxable years beginning on or after January 1, 2011, and ending prior to January 1, 2015, an amount equal to 5% of the taxpayer's net income for the taxable year.

(5.1) In the case of an individual, trust, or estate, for taxable years beginning prior to January 1, 2015, and ending after December 31, 2014, an amount equal to the sum of (i) 5% of the taxpayer's net income for the period prior to January 1, 2015, as calculated under Section 202.5, and (ii) 3.75% of the taxpayer's net income for the period after December 31, 2014, as calculated under Section 202.5.

(5.2) In the case of an individual, trust, or estate, for taxable years beginning on or after January 1, 2015, and ending prior to January 1, 2025, an amount equal to 3.75% of the taxpayer's net income for the taxable year.

(5.3) In the case of an individual, trust, or estate, for taxable years beginning prior to January 1, 2025, and ending after December 31, 2024, an amount equal to the sum of (i) 3.75% of the taxpayer's net income for the period SB3616 Enrolled - 37 - LRB097 19794 HLH 65064 b prior to January 1, 2025, as calculated under Section 202.5, and (ii) 3.25% of the taxpayer's net income for the period after December 31, 2024, as calculated under Section 202.5.

(5.4) In the case of an individual, trust, or estate, for taxable years beginning on or after January 1, 2025, an amount equal to 3.25% of the taxpayer's net income for the taxable year.

(6) In the case of a corporation, for taxable years ending prior to July 1, 1989, an amount equal to 4% of the taxpayer's net income for the taxable year.

(7) In the case of a corporation, for taxable years beginning prior to July 1, 1989 and ending after June 30, 1989, an amount equal to the sum of (i) 4% of the taxpayer's net income for the period prior to July 1, 1989, as calculated under Section 202.3, and (ii) 4.8% of the taxpayer's net income for the period after June 30, 1989, as calculated under Section 202.3.

(8) In the case of a corporation, for taxable years beginning after June 30, 1989, and ending prior to January 1, 2011, an amount equal to 4.8% of the taxpayer's net income for the taxable year.

(9) In the case of a corporation, for taxable years beginning prior to January 1, 2011, and ending after December 31, 2010, an amount equal to the sum of (i) 4.8% of the taxpayer's net income for the period prior to SB3616 Enrolled - 38 - LRB097 19794 HLH 65064 b January 1, 2011, as calculated under Section 202.5, and (ii) 7% of the taxpayer's net income for the period after December 31, 2010, as calculated under Section 202.5.

(10) In the case of a corporation, for taxable years beginning on or after January 1, 2011, and ending prior to January 1, 2015, an amount equal to 7% of the taxpayer's net income for the taxable year.

(11) In the case of a corporation, for taxable years beginning prior to January 1, 2015, and ending after December 31, 2014, an amount equal to the sum of (i) 7% of the taxpayer's net income for the period prior to January 1, 2015, as calculated under Section 202.5, and (ii) 5.25% of the taxpayer's net income for the period after December 31, 2014, as calculated under Section 202.5.

(12) In the case of a corporation, for taxable years beginning on or after January 1, 2015, and ending prior to January 1, 2025, an amount equal to 5.25% of the taxpayer's net income for the taxable year.

(13) In the case of a corporation, for taxable years beginning prior to January 1, 2025, and ending after December 31, 2024, an amount equal to the sum of (i) 5.25% of the taxpayer's net income for the period prior to January 1, 2025, as calculated under Section 202.5, and (ii) 4.8% of the taxpayer's net income for the period after December 31, 2024, as calculated under Section 202.5.

(14) In the case of a corporation, for taxable years SB3616 Enrolled - 39 - LRB097 19794 HLH 65064 b beginning on or after January 1, 2025, an amount equal to 4.8% of the taxpayer's net income for the taxable year.

The rates under this subsection (b) are subject to the provisions of Section 201.5.

(c) Personal Property Tax Replacement Income Tax.

Beginning on July 1, 1979 and thereafter, in addition to such income tax, there is also hereby imposed the Personal Property Tax Replacement Income Tax measured by net income on every corporation (including Subchapter S corporations), partnership and trust, for each taxable year ending after June 30, 1979.

Such taxes are imposed on the privilege of earning or receiving income in or as a resident of this State.

The Personal Property Tax Replacement Income Tax shall be in addition to the income tax imposed by subsections (a) and (b) of this Section and in addition to all other occupation or privilege taxes imposed by this State or by any municipal corporation or political subdivision thereof.

(d) Additional Personal Property Tax Replacement Income Tax Rates.

The personal property tax replacement income tax imposed by this subsection and subsection (c) of this Section in the case of a corporation, other than a Subchapter S corporation and except as adjusted by subsection (d-1), shall be an additional amount equal to 2.85% of such taxpayer's net income for the taxable year, except that beginning on January 1, 1981, and thereafter, the rate of 2.85% specified in this subsection shall be reduced to 2.5%, and in the case of a SB3616 Enrolled - 40 - LRB097 19794 HLH 65064 b partnership, trust or a Subchapter S corporation shall be an additional amount equal to 1.5% of such taxpayer's net income for the taxable year.

(d-1) Rate reduction for certain foreign insurers.

In the case of a foreign insurer, as defined by Section 35A-5 of the Illinois Insurance Code, whose state or country of domicile imposes on insurers domiciled in Illinois a retaliatory tax (excluding any insurer whose premiums from reinsurance assumed are 50% or more of its total insurance premiums as determined under paragraph (2) of subsection (b) of Section 304, except that for purposes of this determination premiums from reinsurance do not include premiums from inter-affiliate reinsurance arrangements), beginning with taxable years ending on or after December 31, 1999, the sum of the rates of tax imposed by subsections (b) and (d) shall be reduced (but not increased) to the rate at which the total amount of tax imposed under this Act, net of all credits allowed under this Act, shall equal (i) the total amount of tax that would be imposed on the foreign insurer's net income allocable to Illinois for the taxable year by such foreign insurer's state or country of domicile if that net income were subject to all income taxes and taxes measured by net income imposed by such foreign insurer's state or country of domicile, net of all credits allowed or (ii) a rate of zero if no such tax is imposed on such income by the foreign insurer's state of domicile.

For the purposes of this subsection (d-1), an inter-affiliate includes SB3616 Enrolled - 41 - LRB097 19794 HLH 65064 b a mutual insurer under common management.

(1) For the purposes of subsection (d-1), in no event shall the sum of the rates of tax imposed by subsections (b) and (d) be reduced below the rate at which the sum of:

(A) the total amount of tax imposed on such foreign insurer under this Act for a taxable year, net of all credits allowed under this Act, plus (B) the privilege tax imposed by Section 409 of the Illinois Insurance Code, the fire insurance company tax imposed by Section 12 of the Fire Investigation Act, and the fire department taxes imposed under Section 11-10-1 of the Illinois Municipal Code, equals 1.25% for taxable years ending prior to December 31, 2003, or 1.75% for taxable years ending on or after December 31, 2003, of the net taxable premiums written for the taxable year, as described by subsection (1) of Section 409 of the Illinois Insurance Code.

This paragraph will in no event increase the rates imposed under subsections (b) and (d).

(2) Any reduction in the rates of tax imposed by this subsection shall be applied first against the rates imposed by subsection (b) and only after the tax imposed by subsection (a) net of all credits allowed under this Section other than the credit allowed under subsection (i) has been reduced to zero, against the rates imposed by subsection (d).

SB3616 Enrolled - 42 - LRB097 19794 HLH 65064 b This subsection (d-1) is exempt from the provisions of Section 250.

(e) Investment credit.

A taxpayer shall be allowed a credit against the Personal Property Tax Replacement Income Tax for investment in qualified property.

(1) A taxpayer shall be allowed a credit equal to .5% of the basis of qualified property placed in service during the taxable year, provided such property is placed in service on or after July 1, 1984.

There shall be allowed an additional credit equal to .5% of the basis of qualified property placed in service during the taxable year, provided such property is placed in service on or after July 1, 1986, and the taxpayer's base employment within Illinois has increased by 1% or more over the preceding year as determined by the taxpayer's employment records filed with the Illinois Department of Employment Security.

Taxpayers who are new to Illinois shall be deemed to have met the 1% growth in base employment for the first year in which they file employment records with the Illinois Department of Employment Security.

The provisions added to this Section by Public Act 85-1200 (and restored by Public Act 87-895) shall be construed as declaratory of existing law and not as a new enactment.

If, in any year, the increase in base employment within Illinois over the preceding year is less than 1%, the additional credit shall be limited to that percentage times a fraction, the SB3616 Enrolled - 43 - LRB097 19794 HLH 65064 b numerator of which is .5% and the denominator of which is 1%, but shall not exceed .5%.

The investment credit shall not be allowed to the extent that it would reduce a taxpayer's liability in any tax year below zero, nor may any credit for qualified property be allowed for any year other than the year in which the property was placed in service in Illinois.

For tax years ending on or after December 31, 1987, and on or before December 31, 1988, the credit shall be allowed for the tax year in which the property is placed in service, or, if the amount of the credit exceeds the tax liability for that year, whether it exceeds the original liability or the liability as later amended, such excess may be carried forward and applied to the tax liability of the 5 taxable years following the excess credit years if the taxpayer (i) makes investments which cause the creation of a minimum of 2,000 full-time equivalent jobs in Illinois, (ii) is located in an enterprise zone established pursuant to the Illinois Enterprise Zone Act and (iii) is certified by the Department of Commerce and Community Affairs (now Department of Commerce and Economic Opportunity) as complying with the requirements specified in clause (i) and (ii) by July 1, 1986.

The Department of Commerce and Community Affairs (now Department of Commerce and Economic Opportunity) shall notify the Department of Revenue of all such certifications immediately.

For tax years ending SB3616 Enrolled - 44 - LRB097 19794 HLH 65064 b after December 31, 1988, the credit shall be allowed for the tax year in which the property is placed in service, or, if the amount of the credit exceeds the tax liability for that year, whether it exceeds the original liability or the liability as later amended, such excess may be carried forward and applied to the tax liability of the 5 taxable years following the excess credit years.

The credit shall be applied to the earliest year for which there is a liability.

If there is credit from more than one tax year that is available to offset a liability, earlier credit shall be applied first.

(2) The term "qualified property" means property which:

(A) is tangible, whether new or used, including buildings and structural components of buildings and signs that are real property, but not including land or improvements to real property that are not a structural component of a building such as landscaping, sewer lines, local access roads, fencing, parking lots, and other appurtenances;

(B) is depreciable pursuant to Section 167 of the Internal Revenue Code, except that "3-year property" as defined in Section 168(c)(2)(A) of that Code is not eligible for the credit provided by this subsection (e);

(C) is acquired by purchase as defined in Section SB3616 Enrolled - 45 - LRB097 19794 HLH 65064 b 179(d) of the Internal Revenue Code;

(D) is used in Illinois by a taxpayer who is primarily engaged in manufacturing, or in mining coal or fluorite, or in retailing, or was placed in service on or after July 1, 2006 in a River Edge Redevelopment Zone established pursuant to the River Edge Redevelopment Zone Act;

and (E) has not previously been used in Illinois in such a manner and by such a person as would qualify for the credit provided by this subsection (e) or subsection (f).

(3) For purposes of this subsection (e), "manufacturing" means the material staging and production of tangible personal property by procedures commonly regarded as manufacturing, processing, fabrication, or assembling which changes some existing material into new shapes, new qualities, or new combinations.

For purposes of this subsection (e) the term "mining" shall have the same meaning as the term "mining" in Section 613(c) of the Internal Revenue Code.

For purposes of this subsection (e), the term "retailing" means the sale of tangible personal property for use or consumption and not for resale, or services rendered in conjunction with the sale of tangible personal property for use or consumption and not for resale.

For purposes of this subsection (e), "tangible personal property" has the same meaning as when that term SB3616 Enrolled - 46 - LRB097 19794 HLH 65064 b is used in the Retailers' Occupation Tax Act, and, for taxable years ending after December 31, 2008, does not include the generation, transmission, or distribution of electricity.

(4) The basis of qualified property shall be the basis used to compute the depreciation deduction for federal income tax purposes.

(5) If the basis of the property for federal income tax depreciation purposes is increased after it has been placed in service in Illinois by the taxpayer, the amount of such increase shall be deemed property placed in service on the date of such increase in basis.

(6) The term "placed in service" shall have the same meaning as under Section 46 of the Internal Revenue Code.

(7) If during any taxable year, any property ceases to be qualified property in the hands of the taxpayer within 48 months after being placed in service, or the situs of any qualified property is moved outside Illinois within 48 months after being placed in service, the Personal Property Tax Replacement Income Tax for such taxable year shall be increased.

Such increase shall be determined by (i) recomputing the investment credit which would have been allowed for the year in which credit for such property was originally allowed by eliminating such property from such computation and, (ii) subtracting such recomputed credit from the amount of credit previously allowed.

For the SB3616 Enrolled - 47 - LRB097 19794 HLH 65064 b purposes of this paragraph (7), a reduction of the basis of qualified property resulting from a redetermination of the purchase price shall be deemed a disposition of qualified property to the extent of such reduction.

(8) Unless the investment credit is extended by law, the basis of qualified property shall not include costs incurred after December 31, 2013, except for costs incurred pursuant to a binding contract entered into on or before December 31, 2013.

(9) Each taxable year ending before December 31, 2000, a partnership may elect to pass through to its partners the credits to which the partnership is entitled under this subsection (e) for the taxable year.

A partner may use the credit allocated to him or her under this paragraph only against the tax imposed in subsections (c) and (d) of this Section.

If the partnership makes that election, those credits shall be allocated among the partners in the partnership in accordance with the rules set forth in Section 704(b) of the Internal Revenue Code, and the rules promulgated under that Section, and the allocated amount of the credits shall be allowed to the partners for that taxable year.

The partnership shall make this election on its Personal Property Tax Replacement Income Tax return for that taxable year.

The election to pass through the credits shall be irrevocable.

For taxable years ending on or after December 31, 2000, SB3616 Enrolled - 48 - LRB097 19794 HLH 65064 b a partner that qualifies its partnership for a subtraction under subparagraph (I) of paragraph (2) of subsection (d) of Section 203 or a shareholder that qualifies a Subchapter S corporation for a subtraction under subparagraph (S) of paragraph (2) of subsection (b) of Section 203 shall be allowed a credit under this subsection (e) equal to its share of the credit earned under this subsection (e) during the taxable year by the partnership or Subchapter S corporation, determined 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.

This paragraph is exempt from the provisions of Section 250.

(f) Investment credit;

Enterprise Zone;

River Edge Redevelopment Zone.

(1) A taxpayer shall be allowed a credit against the tax imposed by subsections (a) and (b) of this Section for investment in qualified property which is placed in service in an Enterprise Zone created pursuant to the Illinois Enterprise Zone Act or, for property placed in service on or after July 1, 2006, a River Edge Redevelopment Zone established pursuant to the River Edge Redevelopment Zone Act.

For partners, shareholders of Subchapter S corporations, and owners of limited liability companies, if the liability company is treated as a partnership for purposes of federal and State income taxation, there shall SB3616 Enrolled - 49 - LRB097 19794 HLH 65064 b be allowed a credit under this subsection (f) to be determined 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.

The credit shall be .5% of the basis for such property.

The credit shall be available only in the taxable year in which the property is placed in service in the Enterprise Zone or River Edge Redevelopment Zone and shall not be allowed to the extent that it would reduce a taxpayer's liability for the tax imposed by subsections (a) and (b) of this Section to below zero.

For tax years ending on or after December 31, 1985, the credit shall be allowed for the tax year in which the property is placed in service, or, if the amount of the credit exceeds the tax liability for that year, whether it exceeds the original liability or the liability as later amended, such 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 liability.

If there is credit from more than one tax year that is available to offset a liability, the credit accruing first in time shall be applied first.

(2) The term qualified property means property which:

(A) is tangible, whether new or used, including buildings and structural components of buildings;

(B) is depreciable pursuant to Section 167 of the SB3616 Enrolled - 50 - LRB097 19794 HLH 65064 b Internal Revenue Code, except that "3-year property" as defined in Section 168(c)(2)(A) of that Code is not eligible for the credit provided by this subsection (f);

(C) is acquired by purchase as defined in Section 179(d) of the Internal Revenue Code;

(D) is used in the Enterprise Zone or River Edge Redevelopment Zone by the taxpayer;

and (E) has not been previously used in Illinois in such a manner and by such a person as would qualify for the credit provided by this subsection (f) or subsection (e).

(3) The basis of qualified property shall be the basis used to compute the depreciation deduction for federal income tax purposes.

(4) If the basis of the property for federal income tax depreciation purposes is increased after it has been placed in service in the Enterprise Zone or River Edge Redevelopment Zone by the taxpayer, the amount of such increase shall be deemed property placed in service on the date of such increase in basis.

(5) The term "placed in service" shall have the same meaning as under Section 46 of the Internal Revenue Code.

(6) If during any taxable year, any property ceases to be qualified property in the hands of the taxpayer within 48 months after being placed in service, or the situs of SB3616 Enrolled - 51 - LRB097 19794 HLH 65064 b any qualified property is moved outside the Enterprise Zone or River Edge Redevelopment Zone within 48 months after being placed in service, the tax imposed under subsections (a) and (b) of this Section for such taxable year shall be increased.

Such increase shall be determined by (i) recomputing the investment credit which would have been allowed for the year in which credit for such property was originally allowed by eliminating such property from such computation, and (ii) subtracting such recomputed credit from the amount of credit previously allowed.

For the purposes of this paragraph (6), a reduction of the basis of qualified property resulting from a redetermination of the purchase price shall be deemed a disposition of qualified property to the extent of such reduction.

(7) There shall be allowed an additional credit equal to 0.5% of the basis of qualified property placed in service during the taxable year in a River Edge Redevelopment Zone, provided such property is placed in service on or after July 1, 2006, and the taxpayer's base employment within Illinois has increased by 1% or more over the preceding year as determined by the taxpayer's employment records filed with the Illinois Department of Employment Security.

Taxpayers who are new to Illinois shall be deemed to have met the 1% growth in base employment for the first year in which they file employment records with the Illinois Department of Employment SB3616 Enrolled - 52 - LRB097 19794 HLH 65064 b Security.

If, in any year, the increase in base employment within Illinois over the preceding year is less than 1%, the additional credit shall be limited to that percentage times a fraction, the numerator of which is 0.5% and the denominator of which is 1%, but shall not exceed 0.5%.

(g) Jobs Tax Credit;

Enterprise Zone, River Edge Redevelopment Zone, and Foreign Trade Zone or Sub-Zone.

(1) A taxpayer conducting a trade or business, in an enterprise zone or a High Impact Business designated by the Department of Commerce and Economic Opportunity or for taxable years ending on or after December 31, 2006, in a River Edge Redevelopment Zone or conducting a trade or business in a federally designated Foreign Trade Zone or Sub-Zone shall be allowed a credit against the tax imposed by subsections (a) and (b) of this Section in the amount of $500 per eligible employee hired to work in the zone during the taxable year.

(2) To qualify for the credit:

(A) the taxpayer must hire 5 or more eligible employees to work in a an enterprise zone, River Edge Redevelopment Zone, or federally designated Foreign Trade Zone or Sub-Zone during the taxable year;

(B) the taxpayer's total employment within the enterprise zone, River Edge Redevelopment Zone, or federally designated Foreign Trade Zone or Sub-Zone must increase by 5 or more full-time employees beyond SB3616 Enrolled - 53 - LRB097 19794 HLH 65064 b the total employed in that zone at the end of the previous tax year for which a jobs tax credit under this Section was taken, or beyond the total employed by the taxpayer as of December 31, 1985, whichever is later;

and (C) the eligible employees must be employed 180 consecutive days in order to be deemed hired for purposes of this subsection.

(3) An "eligible employee" means an employee who is:

(A) Certified by the Department of Commerce and Economic Opportunity as "eligible for services" pursuant to regulations promulgated in accordance with Title II of the Job Training Partnership Act, Training Services for the Disadvantaged or Title III of the Job Training Partnership Act, Employment and Training Assistance for Dislocated Workers Program.

(B) Hired after the enterprise zone, River Edge Redevelopment Zone, or federally designated Foreign Trade Zone or Sub-Zone was designated or the trade or business was located in that zone, whichever is later.

(C) Employed in the enterprise zone, River Edge Redevelopment Zone, or Foreign Trade Zone or Sub-Zone.

An employee is employed in a an enterprise zone or federally designated Foreign Trade Zone or Sub-Zone if his services are rendered there or it is the base of operations for the services performed.

SB3616 Enrolled - 54 - LRB097 19794 HLH 65064 b (D) A full-time employee working 30 or more hours per week.

(4) For tax years ending on or after December 31, 1985 and prior to December 31, 1988, the credit shall be allowed for the tax year in which the eligible employees are hired.

For tax years ending on or after December 31, 1988, the credit shall be allowed for the tax year immediately following the tax year in which the eligible employees are hired.

If the amount of the credit exceeds the tax liability for that year, whether it exceeds the original liability or the liability as later amended, such 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 liability.

If there is credit from more than one tax year that is available to offset a liability, earlier credit shall be applied first.

(5) The Department of Revenue shall promulgate such rules and regulations as may be deemed necessary to carry out the purposes of this subsection (g).

(6) The credit shall be available for eligible employees hired on or after January 1, 1986.

(h) Investment credit;

High Impact Business.

(1) Subject to subsections (b) and (b-5) of Section 5.5 of the Illinois Enterprise Zone Act, a taxpayer shall be allowed a credit against the tax imposed by subsections (a) SB3616 Enrolled - 55 - LRB097 19794 HLH 65064 b and (b) of this Section for investment in qualified property which is placed in service by a Department of Commerce and Economic Opportunity designated High Impact Business.

The credit shall be .5% of the basis for such property.

The credit shall not be available (i) until the minimum investments in qualified property set forth in subdivision (a)(3)(A) of Section 5.5 of the Illinois Enterprise Zone Act have been satisfied or (ii) until the time authorized in subsection (b-5) of the Illinois Enterprise Zone Act for entities designated as High Impact Businesses under subdivisions (a)(3)(B), (a)(3)(C), and (a)(3)(D) of Section 5.5 of the Illinois Enterprise Zone Act, and shall not be allowed to the extent that it would reduce a taxpayer's liability for the tax imposed by subsections (a) and (b) of this Section to below zero.

The credit applicable to such investments shall be taken in the taxable year in which such investments have been completed.

The credit for additional investments beyond the minimum investment by a designated high impact business authorized under subdivision (a)(3)(A) of Section 5.5 of the Illinois Enterprise Zone Act shall be available only in the taxable year in which the property is placed in service and shall not be allowed to the extent that it would reduce a taxpayer's liability for the tax imposed by subsections (a) and (b) of this Section to below zero.

For tax years ending on or after December 31, 1987, the credit shall be allowed SB3616 Enrolled - 56 - LRB097 19794 HLH 65064 b for the tax year in which the property is placed in service, or, if the amount of the credit exceeds the tax liability for that year, whether it exceeds the original liability or the liability as later amended, such 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 liability.

If there is credit from more than one tax year that is available to offset a liability, the credit accruing first in time shall be applied first.

Changes made in this subdivision (h)(1) by Public Act 88-670 restore changes made by Public Act 85-1182 and reflect existing law.

(2) The term qualified property means property which:

(A) is tangible, whether new or used, including buildings and structural components of buildings;

(B) is depreciable pursuant to Section 167 of the Internal Revenue Code, except that "3-year property" as defined in Section 168(c)(2)(A) of that Code is not eligible for the credit provided by this subsection (h);

(C) is acquired by purchase as defined in Section 179(d) of the Internal Revenue Code;

and (D) is not eligible for the Enterprise Zone Investment Credit provided by subsection (f) of this Section.

SB3616 Enrolled - 57 - LRB097 19794 HLH 65064 b (3) The basis of qualified property shall be the basis used to compute the depreciation deduction for federal income tax purposes.

(4) If the basis of the property for federal income tax depreciation purposes is increased after it has been placed in service in a federally designated Foreign Trade Zone or Sub-Zone located in Illinois by the taxpayer, the amount of such increase shall be deemed property placed in service on the date of such increase in basis.

(5) The term "placed in service" shall have the same meaning as under Section 46 of the Internal Revenue Code.

(6) If during any taxable year ending on or before December 31, 1996, any property ceases to be qualified property in the hands of the taxpayer within 48 months after being placed in service, or the situs of any qualified property is moved outside Illinois within 48 months after being placed in service, the tax imposed under subsections (a) and (b) of this Section for such taxable year shall be increased.

Such increase shall be determined by (i) recomputing the investment credit which would have been allowed for the year in which credit for such property was originally allowed by eliminating such property from such computation, and (ii) subtracting such recomputed credit from the amount of credit previously allowed.

For the purposes of this paragraph (6), a reduction of the basis of qualified property resulting from a SB3616 Enrolled - 58 - LRB097 19794 HLH 65064 b redetermination of the purchase price shall be deemed a disposition of qualified property to the extent of such reduction.

(7) Beginning with tax years ending after December 31, 1996, if a taxpayer qualifies for the credit under this subsection (h) and thereby is granted a tax abatement and the taxpayer relocates its entire facility in violation of the explicit terms and length of the contract under Section 18-183 of the Property Tax Code, the tax imposed under subsections (a) and (b) of this Section shall be increased for the taxable year in which the taxpayer relocated its facility by an amount equal to the amount of credit received by the taxpayer under this subsection (h).

(i) Credit for Personal Property Tax Replacement Income Tax.

For tax years ending prior to December 31, 2003, a credit shall be allowed against the tax imposed by subsections (a) and (b) of this Section for the tax imposed by subsections (c) and (d) of this Section.

This credit shall be computed by multiplying the tax imposed by subsections (c) and (d) of this Section by a fraction, the numerator of which is base income allocable to Illinois and the denominator of which is Illinois base income, and further multiplying the product by the tax rate imposed by subsections (a) and (b) of this Section.

Any credit earned on or after December 31, 1986 under this subsection which is unused in the year the credit is computed because it exceeds the tax liability imposed by subsections (a) SB3616 Enrolled - 59 - LRB097 19794 HLH 65064 b and (b) for that year (whether it exceeds the original liability or the liability as later amended) may be carried forward and applied to the tax liability imposed by subsections (a) and (b) of the 5 taxable years following the excess credit year, provided that no credit may be carried forward to any year ending on or after December 31, 2003.

This credit shall be applied first to the earliest year for which there is a liability.

If there is a credit under this subsection from more than one tax year that is available to offset a liability the earliest credit arising under this subsection shall be applied first.

If, during any taxable year ending on or after December 31, 1986, the tax imposed by subsections (c) and (d) of this Section for which a taxpayer has claimed a credit under this subsection (i) is reduced, the amount of credit for such tax shall also be reduced.

Such reduction shall be determined by recomputing the credit to take into account the reduced tax imposed by subsections (c) and (d).

If any portion of the reduced amount of credit has been carried to a different taxable year, an amended return shall be filed for such taxable year to reduce the amount of credit claimed.

(j) Training expense credit.

Beginning with tax years ending on or after December 31, 1986 and prior to December 31, 2003, a taxpayer shall be allowed a credit against the tax imposed by subsections (a) and (b) under this Section for all amounts paid or accrued, on behalf of all persons employed by SB3616 Enrolled - 60 - LRB097 19794 HLH 65064 b the taxpayer in Illinois or Illinois residents employed outside of Illinois by a taxpayer, for educational or vocational training in semi-technical or technical fields or semi-skilled or skilled fields, which were deducted from gross income in the computation of taxable income.

The credit against the tax imposed by subsections (a) and (b) shall be 1.6% of such training expenses.

For partners, shareholders of subchapter S corporations, and owners of limited liability companies, if the liability company is treated as a partnership for purposes of federal and State income taxation, there shall be allowed a credit under this subsection (j) to be determined 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.

Any credit allowed under this subsection which is unused in the year the credit is earned may be carried forward to each of the 5 taxable years following the year for which the credit is first computed until it is used.

This credit shall be applied first to the earliest year for which there is a liability.

If there is a credit under this subsection from more than one tax year that is available to offset a liability the earliest credit arising under this subsection shall be applied first.

No carryforward credit may be claimed in any tax year ending on or after December 31, 2003.

(k) Research and development credit.

For tax years ending after July 1, 1990 and prior to SB3616 Enrolled - 61 - LRB097 19794 HLH 65064 b December 31, 2003, and beginning again for tax years ending on or after December 31, 2004, and ending prior to January 1, 2011, a taxpayer shall be allowed a credit against the tax imposed by subsections (a) and (b) of this Section for increasing research activities in this State.

The credit allowed against the tax imposed by subsections (a) and (b) shall be equal to 6 1/2% of the qualifying expenditures for increasing research activities in this State.

For partners, shareholders of subchapter S corporations, and owners of limited liability companies, if the liability company is treated as a partnership for purposes of federal and State income taxation, there shall be allowed a credit under this subsection to be determined 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.

For purposes of this subsection, "qualifying expenditures" means the qualifying expenditures as defined for the federal credit for increasing research activities which would be allowable under Section 41 of the Internal Revenue Code and which are conducted in this State, "qualifying expenditures for increasing research activities in this State" means the excess of qualifying expenditures for the taxable year in which incurred over qualifying expenditures for the base period, "qualifying expenditures for the base period" means the average of the qualifying expenditures for each year in the base SB3616 Enrolled - 62 - LRB097 19794 HLH 65064 b period, and "base period" means the 3 taxable years immediately preceding the taxable year for which the determination is being made.

Any credit in excess of the tax liability for the taxable year may be carried forward.

A taxpayer may elect to have the unused credit shown on its final completed return carried over as a credit against the tax liability for the following 5 taxable years or until it has been fully used, whichever occurs first;

provided that no credit earned in a tax year ending prior to December 31, 2003 may be carried forward to any year ending on or after December 31, 2003, and no credit may be carried forward to any taxable year ending on or after January 1, 2011.

If an unused credit is carried forward to a given year from 2 or more earlier years, that credit arising in the earliest year will be applied first against the tax liability for the given year.

If a tax liability for the given year still remains, the credit from the next earliest year will then be applied, and so on, until all credits have been used or no tax liability for the given year remains.

Any remaining unused credit or credits then will be carried forward to the next following year in which a tax liability is incurred, except that no credit can be carried forward to a year which is more than 5 years after the year in which the expense for which the credit is given was incurred.

No inference shall be drawn from this amendatory Act of the SB3616 Enrolled - 63 - LRB097 19794 HLH 65064 b 91st General Assembly in construing this Section for taxable years beginning before January 1, 1999.

(l) Environmental Remediation Tax Credit.

(i) For tax years ending after December 31, 1997 and on or before December 31, 2001, a taxpayer shall be allowed a credit against the tax imposed by subsections (a) and (b) of this Section for certain amounts paid for unreimbursed eligible remediation costs, as specified in this subsection.

For purposes of this Section, "unreimbursed eligible remediation costs" means costs approved by the Illinois Environmental Protection Agency ("Agency") under Section 58.14 of the Environmental Protection Act that were paid in performing environmental remediation at a site for which a No Further Remediation Letter was issued by the Agency and recorded under Section 58.10 of the Environmental Protection Act.

The credit must be claimed for the taxable year in which Agency approval of the eligible remediation costs is granted.

The credit is not available to any taxpayer if the taxpayer or any related party caused or contributed to, in any material respect, a release of regulated substances on, in, or under the site that was identified and addressed by the remedial action pursuant to the Site Remediation Program of the Environmental Protection Act.

After the Pollution Control Board rules are adopted pursuant to the Illinois Administrative Procedure Act for the administration and SB3616 Enrolled - 64 - LRB097 19794 HLH 65064 b enforcement of Section 58.9 of the Environmental Protection Act, determinations as to credit availability for purposes of this Section shall be made consistent with those rules.

For purposes of this Section, "taxpayer" includes a person whose tax attributes the taxpayer has succeeded to under Section 381 of the Internal Revenue Code and "related party" includes the persons disallowed a deduction for losses by paragraphs (b), (c), and (f)(1) of Section 267 of the Internal Revenue Code by virtue of being a related taxpayer, as well as any of its partners.

The credit allowed against the tax imposed by subsections (a) and (b) shall be equal to 25% of the unreimbursed eligible remediation costs in excess of $100,000 per site, except that the $100,000 threshold shall not apply to any site contained in an enterprise zone as determined by the Department of Commerce and Community Affairs (now Department of Commerce and Economic Opportunity).

The total credit allowed shall not exceed $40,000 per year with a maximum total of $150,000 per site.

For partners and shareholders of subchapter S corporations, there shall be allowed a credit under this subsection to be determined 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.

(ii) A credit allowed under this subsection that is unused in the year the credit is earned may be carried SB3616 Enrolled - 65 - LRB097 19794 HLH 65064 b forward to each of the 5 taxable years following the year for which the credit is first earned until it is used.

The term "unused credit" does not include any amounts of unreimbursed eligible remediation costs in excess of the maximum credit per site authorized under paragraph (i).

This credit shall be applied first to the earliest year for which there is a liability.

If there is a credit under this subsection from more than one tax year that is available to offset a liability, the earliest credit arising under this subsection shall be applied first.

A credit allowed under this subsection may be sold to a buyer as part of a sale of all or part of the remediation site for which the credit was granted.

The purchaser of a remediation site and the tax credit shall succeed to the unused credit and remaining carry-forward period of the seller.

To perfect the transfer, the assignor shall record the transfer in the chain of title for the site and provide written notice to the Director of the Illinois Department of Revenue of the assignor's intent to sell the remediation site and the amount of the tax credit to be transferred as a portion of the sale.

In no event may a credit be transferred to any taxpayer if the taxpayer or a related party would not be eligible under the provisions of subsection (i).

(iii) For purposes of this Section, the term "site" shall have the same meaning as under Section 58.2 of the Environmental Protection Act.

SB3616 Enrolled - 66 - LRB097 19794 HLH 65064 b (m) Education expense credit.

Beginning with tax years ending after December 31, 1999, a taxpayer who is the custodian of one or more qualifying pupils shall be allowed a credit against the tax imposed by subsections (a) and (b) of this Section for qualified education expenses incurred on behalf of the qualifying pupils.

The credit shall be equal to 25% of qualified education expenses, but in no event may the total credit under this subsection claimed by a family that is the custodian of qualifying pupils exceed $500.

In no event shall a credit under this subsection reduce the taxpayer's liability under this Act to less than zero.

This subsection is exempt from the provisions of Section 250 of this Act.