SB 397 — REVENUE-HOUSING AUTH-REFUNDS

(1) owns or licenses the theatrical rights of the stage presentation for the Illinois production period;

or (2) has contracted or will contract directly with the owner or licensee of the theatrical rights or a person acting on behalf of the owner or licensee to provide live performances of the production.

An applicant that directly or indirectly owns, controls, or operates multiple qualified production facilities shall be presumed to be and considered for the purposes of this Act to be a single applicant;

provided, however, that as to each of the applicant's qualified production facilities, the applicant shall be eligible to separately and contemporaneously (i) apply for and obtain accredited theater production certificates, SB0397 Enrolled - 6 - LRB097 04209 HLH 44248 b (ii) stage accredited theater productions, and (iii) apply for and receive a tax credit award certificate for each of the applicant's accredited theater productions performed at each of the applicant's qualified production facilities.

"Department" means the Department of Commerce and Economic Opportunity.

"Director" means the Director of the Department.

"Illinois labor expenditure" means gross salary or wages including, but not limited to, taxes, benefits, and any other consideration incurred or paid to non-talent employees of the applicant for services rendered to and on behalf of the accredited theater production.

To qualify as an Illinois labor expenditure, the expenditure must be:

(1) incurred or paid by the applicant on or after the effective date of the Act for services related to any portion of an accredited theater production from its pre-production stages, including, but not limited to, the writing of the script, casting, hiring of service providers, purchases from vendors, marketing, advertising, public relations, load in, rehearsals, performances, other accredited theater production related activities, and load out;

(2) directly attributable to the accredited theater production;

(3) limited to the first $100,000 of wages incurred or paid to each employee of an accredited theater production SB0397 Enrolled - 7 - LRB097 04209 HLH 44248 b in each tax year;

(4) included in the federal income tax basis of the property;

(5) paid in the tax year for which the applicant is claiming the tax credit award, or no later than 60 days after the end of the tax year;

(6) paid to persons residing in Illinois at the time payments were made;

and (7) reasonable in the circumstances.

"Illinois production spending" means any and all expenses directly or indirectly incurred relating to an accredited theater production presented in any qualified production facility of the applicant, including, but not limited to, expenditures for:

(1) national marketing, public relations, and the creation and placement of print, electronic, television, billboard, and other forms of advertising;

and (2) the construction and fabrication of scenic materials and elements;

provided, however, that the maximum amount of expenditures attributable to the construction and fabrication of scenic materials and elements eligible for a tax credit award shall not exceed $500,000 per applicant per production in any single tax year.

"Qualified production facility" means a facility located in the State in which live theatrical productions are, or are SB0397 Enrolled - 8 - LRB097 04209 HLH 44248 b intended to be, exclusively presented that contains at least one stage, a seating capacity of 1,200 or more seats, and dressing rooms, storage areas, and other ancillary amenities necessary for the accredited theater production.

"Tax credit award" means the issuance to a taxpayer by the Department of a tax credit award in conformance with Sections 10-40 and 10-45 of this Act.

"Tax year" means a calendar year for the period January 1 to and including December 31.

Section 10-15.

Powers of the Department.

The Department, in addition to those powers granted under the Civil Administrative Code of Illinois, is granted and has all the powers necessary or convenient to carry out and effectuate the purposes and provisions of this Act, including, but not limited to, the power and authority to:

(1) adopt rules deemed necessary and appropriate for the administration of the Tax Credit Award program;

establish forms for applications, notifications, contracts, or any other agreements;

and accept applications at any time during the year;

(2) assist applicants pursuant to the provisions of this Act to promote, foster, and support live theater development and production and its related job creation or retention within the State;

(3) gather information and conduct inquiries, in the SB0397 Enrolled - 9 - LRB097 04209 HLH 44248 b manner and by the methods set forth in this Act, required for the Department to comply with Section 10-40 and, without limitation, obtain information with respect to applicants for the purpose of making any designations or certifications necessary or desirable to assist the Department with any recommendation or guidance in the furtherance of the purposes of this Act and relating to applicants' participation in training, education, and recruitment programs that are organized in cooperation with Illinois colleges and universities or labor organizations designed to promote and encourage the training and hiring of Illinois residents who represent the diversity of the Illinois population;

(4) provide for sufficient personnel to permit administrative, staffing, operating, and related support required to adequately discharge its duties and responsibilities described in this Act from funds as may be appropriated by the General Assembly for the administration of this Act;

and (5) require that the applicant at all times keep proper books and records of accounts relating to the tax credit award, in accordance with generally accepted accounting principles consistently applied, and make, upon reasonable written request by the Department, those books and records available for reasonable Department inspection and audit during the applicant's normal business hours.

Any SB0397 Enrolled - 10 - LRB097 04209 HLH 44248 b documents or data made available to or received from the applicant by any agent, employee, officer, or service provider to the Department shall be deemed confidential and shall not constitute public records to the extent that the documents or data consist of commercial or financial information regarding the operation by the applicant of any theater or any accredited theater production, or any recipient of any tax credit award under this Act.

Section 10-20.

Tax credit award.

Subject to the conditions set forth in this Act, an applicant is entitled to a tax credit award as approved by the Department for qualifying Illinois labor expenditures and Illinois production spending for each tax year in which the applicant is awarded an accredited theater production certificate issued by the Department.

The amount of tax credits awarded pursuant to this Act shall not exceed $2,000,000 in any fiscal year.

Credits shall be awarded on a first-come, first-served basis.

Notwithstanding the foregoing, if the amount of credits applied for in any fiscal year exceeds the amount authorized to be awarded under this Section, the excess credit amount shall be awarded in the next fiscal year in which credits remain available for award and shall be treated as having been applied for on the first day of that fiscal year.

Section 10-25.

Application for certification of accredited SB0397 Enrolled - 11 - LRB097 04209 HLH 44248 b theater production.

Any applicant proposing an accredited theater production located or planned to be located in Illinois may request an accredited theater production certificate by application to the Department.

Section 10-30.

Review of application for accredited theater production certificate.

(a) The Department shall issue an accredited theater production certificate to an applicant if it finds that by a preponderance the following conditions exist:

(1) the applicant intends to make the expenditure in the State required for certification of the accredited theater production;

(2) the applicant's accredited theater production is economically sound and will benefit the people of the State of Illinois by increasing opportunities for employment and will strengthen the economy of Illinois;

(3) the following requirements related to the implementation of a diversity plan have been met:

(i) the applicant has filed with the Department a diversity plan outlining specific goals for hiring Illinois labor expenditure eligible minority persons and females, as defined in the Business Enterprise for Minorities, Females, and Persons with Disabilities Act, and for using vendors receiving certification under the Business Enterprise for Minorities, Females, and Persons with SB0397 Enrolled - 12 - LRB097 04209 HLH 44248 b Disabilities Act;

(ii) the Department has approved the plan as meeting the requirements established by the Department and verified that the applicant has met or made good faith efforts in achieving those goals;

and (iii) the Department has adopted any rules that are necessary to ensure compliance with the provisions set forth in this paragraph and necessary to require that the applicant's plan reflects the diversity of the population of this State;

(4) the applicant's accredited theater production application indicates whether the applicant intends to participate in training, education, and recruitment programs that are organized in cooperation with Illinois colleges and universities, labor organizations, and the holders of accredited theater production certificates and are designed to promote and encourage the training and hiring of Illinois residents who represent the diversity of Illinois;

(5) if not for the tax credit award, the applicant's accredited theater production would not occur in Illinois, which may be demonstrated by any means, including, but not limited to, evidence that:

(i) the applicant, presenter, owner, or licensee of the production rights has other state or international location options at which to present the production and could reasonably and efficiently locate outside of the State, (ii) at least one other state or nation could be considered for the production, (iii) the SB0397 Enrolled - 13 - LRB097 04209 HLH 44248 b receipt of the tax award credit is a major factor in the decision of the applicant, presenter, production owner or licensee as to where the production will be presented and that without the tax credit award the applicant likely would not create or retain jobs in Illinois, or (iv) receipt of the tax credit award is essential to the applicant's decision to create or retain new jobs in the State;

and (6) the tax credit award will result in an overall positive impact to the State, as determined by the Department using the best available data.

(b) If any of the provisions in this Section conflict with any existing collective bargaining agreements, the terms and conditions of those collective bargaining agreements shall control.

(c) The Department shall act expeditiously regarding approval of applications for accredited theater production certificates so as to accommodate the pre-production work, booking, commencement of ticket sales, determination of performance dates, load in, and other matters relating to the live theater productions for which approval is sought.

Section 10-35.

Training programs for skills in critical demand.

To accomplish the purposes of this Act, the Department may use the training programs provided under Section 605-800 of the Department of Commerce and Economic Opportunity Law of the SB0397 Enrolled - 14 - LRB097 04209 HLH 44248 b Civil Administrative Code of Illinois.

Section 10-40.

Issuance of Tax Credit Award Certificate.

(a) In order to qualify for a tax credit award under this Act, an applicant must file an application for each accredited theater production at each of the applicant's qualified production facilities, on forms prescribed by the Department, providing information necessary to calculate the tax credit award and any additional information as reasonably required by the Department.

(b) Upon satisfactory review of the application, the Department shall issue a tax credit award certificate stating the amount of the tax credit award to which the applicant is entitled for that tax year and shall contemporaneously notify the applicant and Illinois Department of Revenue in accordance with Section 222 of the Illinois Income Tax Act.

Section 10-45.

Amount and payment of the tax credit award.

The tax credit award shall be calculated each tax year based upon the filing by the applicant on forms prescribed by the Department containing information regarding qualifying and quantified Illinois labor expenditures, as defined in Section 10-10, net of the limitation in that Section, and Illinois production spending, as defined in Section 10-10, net of the limitation in that Section.

From the amount calculated, the applicant shall be entitled to receive a tax credit award of up SB0397 Enrolled - 15 - LRB097 04209 HLH 44248 b to:

(1) 20% of the Illinois labor expenditures for each tax year;

plus (2) 20% of the Illinois production spending for each tax year;

plus (3) 15% of the Illinois labor expenditures generated by the employment of Illinois residents in geographic areas of high poverty or high unemployment in each tax year, as determined by the Department.

Following the Department's determination of the tax credit award, the Department shall issue the tax credit award to the applicant.

Section 10-50.

Live theater tax credit award program evaluation and reports.

(a) The Department's live theater tax credit award evaluation must include:

(i) an assessment of the effectiveness of the program in creating and retaining new jobs in Illinois;

(ii) an assessment of the revenue impact of the program;

(iii) in the discretion of the Department, a review of the practices and experiences of other states or nations with similar programs;

and (iv) an assessment of the overall success of the program.

The Department may make a recommendation to SB0397 Enrolled - 16 - LRB097 04209 HLH 44248 b extend, modify, or not extend the program based on the evaluation.

(b) At the end of each fiscal quarter, the Department shall submit to the General Assembly a report that includes, without limitation:

(i) an assessment of the economic impact of the program, including the number of jobs created and retained, and whether the job positions are entry level, management, vendor, or production related;

(ii) the amount of accredited theater production spending brought to Illinois, including the amount of spending and type of Illinois vendors hired in connection with an accredited theater production;

and (iii) a determination of whether those receiving qualifying Illinois labor expenditure salaries or wages reflect the geographical, racial and ethnic, gender, and income level diversity of the State of Illinois.

(c) At the end of each fiscal year, the Department shall submit to the General Assembly a report that includes, without limitation:

(i) the identification of each vendor that provided goods or services that were included in an accredited theater production's Illinois production spending;

(ii) a statement of the amount paid to each identified vendor by the accredited theater production and whether the vendor is a minority or female owned business as defined in SB0397 Enrolled - 17 - LRB097 04209 HLH 44248 b Section 2 of the Business Enterprise for Minorities, Females, and Persons with Disabilities Act;

and (iii) a description of the steps taken by the Department to encourage accredited theater productions to use vendors who are minority or female owned businesses.

Section 10-55.

Program terms and conditions.

Any documentary materials or data made available or received from an applicant by any agent or employee of the Department are confidential and are not public records to the extent that the materials or data consist of commercial or financial information regarding the operation of or the production of the applicant or recipient of any tax credit award under this Act.

Section 10-80.

The Illinois Income Tax Act is amended by adding Section 222 as follows:

(35 ILCS 5/222 new) Sec.

222.

Live theater production credit.

(a) For tax years beginning on or after January 1, 2012, a taxpayer who has received a tax credit award under the Live Theater Production Tax Credit Act is entitled to a credit against the taxes imposed under subsections (a) and (b) of Section 201 of this Act in an amount determined under that Act by the Department of Commerce and Economic Opportunity.

(b) If the taxpayer is a partnership, limited liability SB0397 Enrolled - 18 - LRB097 04209 HLH 44248 b partnership, limited liability company, or Subchapter S corporation, the tax credit award is allowed to the partners, unit holders, or shareholders in accordance with the determination of income and distributive share of income under Sections 702 and 704 and Subchapter S of the Internal Revenue Code.

(c) A sale, assignment, or transfer of the tax credit award may be made by the taxpayer earning the credit within one year after the credit is awarded in accordance with rules adopted by the Department of Commerce and Economic Opportunity.

(d) The Department of Revenue, in cooperation with the Department of Commerce and Economic Opportunity, shall adopt rules to enforce and administer the provisions of this Section.

(e) The tax credit award may not be carried back.

If the amount of the credit exceeds the tax liability for the year, the excess may be carried forward and applied to the tax liability of the 5 tax years following the excess credit year.

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

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

In no event may a credit under this Section reduce the taxpayer's liability to less than zero.

Article 15.

Amendatory Provisions SB0397 Enrolled - 19 - LRB097 04209 HLH 44248 b Section 15-5.

The Economic Development Area Tax Increment Allocation Act is amended by changing Sections 3, 4, 5, 8, 9, and 11 and by adding Sections 4.5 and 4.7 as follows:

(20 ILCS 620/3) (from Ch.

67 1/2, par.

1003) Sec.

3.

Definitions.

In this Act, words or terms shall have the following meanings unless the context or usage clearly indicates that another meaning is intended.

(a) "Department" means the Department of Commerce and Economic Opportunity.

(b) "Economic development plan" means the written plan of a municipality which sets forth an economic development program for an economic development project area.

Each economic development plan shall include but not be limited to (1) estimated economic development project costs, (2) the sources of funds to pay such costs, (3) the nature and term of any obligations to be issued by the municipality to pay such costs, (4) the most recent equalized assessed valuation of the economic development project area, (5) an estimate of the equalized assessed valuation of the economic development project area after completion of an economic development project, (6) the estimated date of completion of any economic development project proposed to be undertaken, (7) a general description of any proposed developer, user, or tenant of any property to be located or improved within the economic development project area, (8) a description of the type, SB0397 Enrolled - 20 - LRB097 04209 HLH 44248 b structure and general character of the facilities to be developed or improved in the economic development project area, (9) a description of the general land uses to apply in the economic development project area, (10) a description of the type, class and number of employees to be employed in the operation of the facilities to be developed or improved in the economic development project area, and (11) a commitment by the municipality to fair employment practices and an affirmative action plan with respect to any economic development program to be undertaken by the municipality.

(c) "Economic development project" means any development project in furtherance of the objectives of this Act.

(d) "Economic development project area" means any improved or vacant area which (1) is located within or partially within or partially without the territorial limits of a municipality, provided that no area without the territorial limits of a municipality shall be included in an economic development project area without the express consent of the Department, acting as agent for the State, (2) is contiguous, (3) is not less in the aggregate than three hundred twenty acres, (4) is suitable for siting by any commercial, manufacturing, industrial, research or transportation enterprise of facilities to include but not be limited to commercial businesses, offices, factories, mills, processing plants, assembly plants, packing plants, fabricating plants, industrial or commercial distribution centers, warehouses, SB0397 Enrolled - 21 - LRB097 04209 HLH 44248 b repair overhaul or service facilities, freight terminals, research facilities, test facilities or transportation facilities, whether or not such area has been used at any time for such facilities and whether or not the area has been used or is suitable for other uses, including commercial agricultural purposes, and (5) which has been approved and certified by the Department pursuant to this Act.

(e) "Economic development project costs" mean and include the sum total of all reasonable or necessary costs incurred by a municipality incidental to an economic development project, including, without limitation, the following:

(1) Costs of studies, surveys, development of plans and specifications, implementation and administration of an economic development plan, personnel and professional service costs for architectural, engineering, legal, marketing, financial, planning, police, fire, public works or other services, provided that no charges for professional services may be based on a percentage of incremental tax revenues;

(2) Property assembly costs within an economic development project area, including but not limited to acquisition of land and other real or personal property or rights or interests therein, and specifically including payments to developers or other nongovernmental persons as reimbursement for property assembly costs incurred by such developer or other nongovernmental person;

(3) Site preparation costs, including but not limited to SB0397 Enrolled - 22 - LRB097 04209 HLH 44248 b clearance of any area within an economic development project area by demolition or removal of any existing buildings, structures, fixtures, utilities and improvements and clearing and grading;

and including installation, repair, construction, reconstruction, or relocation of public streets, public utilities, and other public site improvements within or without an economic development project area which are essential to the preparation of the economic development project area for use in accordance with an economic development plan;

and specifically including payments to developers or other nongovernmental persons as reimbursement for site preparation costs incurred by such developer or nongovernmental person;

(4) Costs of renovation, rehabilitation, reconstruction, relocation, repair or remodeling of any existing buildings, improvements, and fixtures within an economic development project area, and specifically including payments to developers or other nongovernmental persons as reimbursement for such costs incurred by such developer or nongovernmental person;

(5) Costs of construction , acquisition, and operation within an economic development project area of public improvements, including but not limited to, publicly owned buildings, structures, works, utilities or fixtures;

provided that no allocation made to the municipality pursuant to subparagraph (A) of paragraph (2) of subsection (g) of Section 4 of this Act or subparagraph (A) of paragraph (4) of SB0397 Enrolled - 23 - LRB097 04209 HLH 44248 b subsection (g) of Section 4 of this Act shall be used to operate a convention center or similar entertainment complex or venue;

(6) Financing costs, including but not limited to all necessary and incidental expenses related to the issuance of obligations, payment of any interest on any obligations issued hereunder which accrues during the estimated period of construction of any economic development project for which such obligations are issued and for not exceeding 36 months thereafter, and any reasonable reserves related to the issuance of such obligations;

(7) All or a portion of a taxing district's capital costs resulting from an economic development project necessarily incurred or estimated to be incurred by a taxing district in the furtherance of the objectives of an economic development project, to the extent that the municipality by written agreement accepts and approves such costs;

(8) Relocation costs to the extent that a municipality determines that relocation costs shall be paid or is required to make payment of relocation costs by federal or State law;

(9) The estimated tax revenues from real property in an economic development project area acquired by a municipality which, according to the economic development plan, is to be used for a private use and which any taxing district would have received had the municipality not adopted tax increment allocation financing for an economic development project area SB0397 Enrolled - 24 - LRB097 04209 HLH 44248 b and which would result from such taxing district's levies made after the time of the adoption by the municipality of tax increment allocation financing to the time the current equalized assessed value of real property in the economic development project area exceeds the total initial equalized value of real property in said area;

(10) Costs of job training, advanced vocational or career education, including but not limited to courses in occupational, semi-technical or technical fields leading directly to employment, incurred by one or more taxing districts, provided that such costs are related to the establishment and maintenance of additional job training, advanced vocational education or career education programs for persons employed or to be employed by employers located in an economic development project area, and further provided that when such costs are incurred by a taxing district or taxing districts other than the municipality they shall be set forth in a written agreement by or among the municipality and the taxing district or taxing districts, which agreement describes the program to be undertaken, including but not limited to the number of employees to be trained, a description of the training and services to be provided, the number and type of positions available or to be available, itemized costs of the program and sources of funds to pay the same, and the term of the agreement.

Such costs include, specifically, the payment by community college districts of costs pursuant to Sections 3-37, SB0397 Enrolled - 25 - LRB097 04209 HLH 44248 b 3-38, 3-40 and 3-40.1 of the Public Community College Act and by school districts of costs pursuant to Sections 10-22.20a and 10-23.3a of The School Code;

(11) Private financing costs incurred by developers or other nongovernmental persons in connection with an economic development project, and specifically including payments to developers or other nongovernmental persons as reimbursement for such costs incurred by such developer or other nongovernmental person, provided that:

(A) private financing costs shall be paid or reimbursed by a municipality only pursuant to the prior official action of the municipality evidencing an intent to pay or reimburse such private financing costs;

(B) except as provided in subparagraph (D), the aggregate amount of such costs paid or reimbursed by a municipality in any one year shall not exceed 30% of such costs paid or incurred by the developer or other nongovernmental person in that year;

(C) private financing costs shall be paid or reimbursed by a municipality solely from the special tax allocation fund established pursuant to this Act and shall not be paid or reimbursed from the proceeds of any obligations issued by a municipality;

(D) if there are not sufficient funds available in the special tax allocation fund in any year to make such payment or reimbursement in full, any amount of such interest cost SB0397 Enrolled - 26 - LRB097 04209 HLH 44248 b remaining to be paid or reimbursed by a municipality shall accrue and be payable when funds are available in the special tax allocation fund to make such payment;

and (E) in connection with its approval and certification of an economic development project pursuant to Section 5 of this Act, the Department shall review any agreement authorizing the payment or reimbursement by a municipality of private financing costs in its consideration of the impact on the revenues of the municipality and the affected taxing districts of the use of tax increment allocation financing.

(f) "Municipality" means a city, village or incorporated town.

(g) "Obligations" means any instrument evidencing the obligation of a municipality to pay money, including without limitation, bonds, notes, installment or financing contracts, certificates, tax anticipation warrants or notes, vouchers, and any other evidence of indebtedness.

(h) "Taxing districts" means counties, townships, municipalities, and school, road, park, sanitary, mosquito abatement, forest preserve, public health, fire protection, river conservancy, tuberculosis sanitarium and any other municipal corporations or districts with the power to levy taxes upon property located within the economic development project area.

92-826,94-793, eff.

8-21-02;5-19-06.) SB0397 Enrolled - 27 - LRB097 04209 HLH 44248 b (20 ILCS 620/4) (from Ch.

93-836,67 eff.1/2, par.

1-1-05.)1004) SectionSec. 15.

The4. Housing Authorities Act is amended by adding Section 8.1d as follows:

(310Establishment ILCSof 10/8.1deconomic new)development Sec.project areas;

8.1d.ordinance;

Collectionnotice; of debt;

setoffhearing; program.

(a)changes Definitions.in economic development plan.

AsEconomic useddevelopment inproject thisareas Section:shall be established as follows:

"Debtor"(a) meansThe acorporate personauthorities havingof a delinquentmunicipality debtshall withby ordinance propose the establishment of an economic development project area and fix a housingtime authorityand whichplace hasfor nota beenpublic adjusted,hearing, satisfied,and orshall setsubmit asidea bycertified courtcopy order,of orthe dischargedordinance inas bankruptcy.adopted to the Department.

"Delinquent(b) debt"(1) meansNotice aof sumthe whichpublic hashearing beenshall reducedbe togiven judgmentby inpublication a final court order and ismailing. due and owing a housing authority, including collection costs, court costs, fines, penalties, and interest which have accrued through contract, subrogation, tort, operation of law, or other legal theory.

"DelinquentNotice debt"by doespublication notshall includebe sumsgiven owedby publication at least twice, the first publication to abe housingnot authoritymore whenthan the30 housingnor authorityless andthan the10 debtordays haveprior enteredto intothe hearing in a writtennewspaper paymentof agreementgeneral andcirculation within the debtortaxing isdistricts currenthaving property in meeting the obligationsproposed ofeconomic thedevelopment agreement.project area.

"DelinquentNotice debt"by alsomailing includesshall anybe fine,given penalty,by cost,depositing fee,such assessment,notice surcharge,together servicewith charge,a restitution,copy orof otherthe SB0397proposed Engrossedeconomic -development 4plan -in LRB097the 04209United HLHStates 44248mails b amount imposed by acertified courtmail oraddressed asto athe directperson consequenceor ofpersons ain finalwhose courtname orderthe whichgeneral istaxes receivedfor bythe orlast payablepreceding toyear thewere clerkpaid ofon theeach appropriatelot, courtblock, tract, or treasurerparcel of theland entitylying wherewithin the courteconomic isdevelopment located.project area.

"Refund"The meansnotice anyshall individualbe Illinoismailed incomenot taxless refundthan payable.10 days prior to the date set for the public hearing.

"Refund"In alsothe includesevent ataxes refundfor belongingthe tolast apreceding debtoryear resultingwere fromnot paid, the filingnotice ofshall aalso jointbe incomesent to the persons last listed on the tax return.rolls SB0397 Enrolled - 28 - LRB097 04209 HLH 44248 b within the preceding 3 years as the owners of such property.

(b)(2) CollectionThe ofnotices debt;issued pursuant to this Section shall include the following:

information(A) toThe betime givenand byplace housingof authority;public hearing;

information(B) toThe beboundaries givenof the proposed economic development project area by Departmentlegal ofdescription Revenueand toby housingstreet authority.location where possible;

(1)(C) TheA collectionnotification remedythat underall thisinterested Sectionpersons iswill inbe additiongiven an opportunity to anybe otherheard remedyat availablethe bypublic law.hearing;

(2)(D) HousingAn authoritiesinvitation mayfor any person to submit alternative proposals or bids for collectionany underproposed theconveyance, procedurelease, establishedmortgage byor thisother Sectiondisposition allof delinquentland debtswithin whichthe theyproposed areeconomic owed.development project area;

(3)(E) AllA housingdescription authorities, whenever possible, shall obtain the full name, social security number, address, and any other identifying information, required by rules promulgated by the Department of Revenue for implementation of this Section, from any person for whom the housingeconomic authoritiesdevelopment provideplan any service or transacteconomic anydevelopment businessproject andif whoa theplan housingor authoritiesproject canis foresee may become a debtorsubject undermatter the terms of thisthe Section.hearing;

(4)and Upon(F) requestSuch fromother amatters housingas authority, the Departmentmunicipality ofmay Revenuedeem shallappropriate. furnish to the housing authority any information the Department of Revenue deems SB0397 Engrossed - 5 - LRB097 04209 HLH 44248 b necessary to properly notify the debtor.

(c)(3) ChoiceNot ofless housingthan authority30 days prior to the date set for hearing, the municipality shall give notice by mail as provided in this subsection (b) to useall taxing districts, of orwhich participationtaxable property is included in setoffthe program.economic development project area, and to the Department.

IfIn addition to the housingother authorityrequirements determinesunder thatthis subsection (b), the administrativenotice costshall ofinclude utilizingan thisinvitation Sectionto isthe prohibitive,Department itand mayeach choosetaxing notdistrict to participatesubmit incomments to the setoffmunicipality program,concerning orthe itSB0397 mayEnrolled choose- to29 participate- onlyLRB097 in04209 casesHLH 44248 b subject matter of delinquentthe debtshearing aboveprior anto amountthe itdate determinesof appropriate.hearing.

(d)(c) At the public hearing any interested person, the Department ofor Revenueany toaffected assisttaxing indistrict collectionmay offile delinquentwritten debtobjections bywith setoffthe ofmunicipal anyclerk refundsand duemay be heard orally with respect to debtor.any issues embodied in the notice.

SubjectThe tomunicipality theshall limitationshear containedand indetermine thisall Section,alternate theproposals Departmentor ofbids Revenue,for uponany request,proposed shallconveyance, renderlease, assistancemortgage inor theother collectiondisposition of anyland delinquentand debtall owingprotests toand anyobjections housingat authoritythe byhearing, settingand offthe anyhearing refundsmay duebe theadjourned debtorto fromanother thedate Departmentwithout offurther Revenuenotice byother thethan suma certifiedmotion byto be entered upon the housingminutes authorityfixing asthe delinquenttime debt.and place of the adjourned hearing.

(e)Public Notificationhearings bywith housingregard authority;to an economic development plan, economic development project area, or economic development project may be held simultaneously.

refund(d) determinations;At the public hearing or at any time prior to the adoption by the municipality of an ordinance approving an economic development plan, the municipality may make changes in the economic development plan.

DepartmentChanges which (1) alter the exterior boundaries of Revenuethe liability.proposed economic development project area, (2) substantially affect the general land uses established in the proposed economic development plan, (3) substantially change the nature of the proposed economic development project, (4) change the general description of any proposed developer, user or tenant of any property to be located or improved within the economic development project area, or (5) change the description of the type, class and SB0397 Enrolled - 30 - LRB097 04209 HLH 44248 b number of employees to be employed in the operation of the facilities to be developed or improved within the economic development project area shall be made only after notice and hearing pursuant to the procedures set forth in this Section.

(1)Changes Awhich housingdo authoritynot seeking(1) toalter attemptthe collectionexterior boundaries of a delinquentproposed debteconomic throughdevelopment setoffproject shallarea, notify(2) substantially affect the Departmentgeneral ofland Revenueuses established in writingthe andproposed supplyeconomic informationdevelopment plan, (3) substantially change the Departmentnature of Revenuethe determinesproposed necessaryeconomic development project, (4) change the general description of any proposed developer, user or tenant of any property to identifybe located or improved within the debtoreconomic whosedevelopment refundproject isarea, soughtor (5) change the description of the type, class and number of employees to be setemployed off.in the operation of the facilities to be developed or improved within the economic development project area may be made without further hearing, provided that the municipality shall give notice of its changes by mail to the Department and to each affected taxing district and by publication in a newspaper or newspapers of general circulation within the affected taxing districts.

ASuch requestnotice forby setoffmail mayand beby madepublication onlyshall aftereach theoccur housingnot authoritylater hasthan notified10 thedays debtorfollowing of its intention to cause the debtor'sadoption refundby toordinance beof setsuch off.changes.

The(e) housingAt authorityany shalltime promptlywithin notify30 days of the debtorfinal whenadjournment of the liabilitypublic outhearing, ofa whichmunicipality may, by ordinance, approve the economic development plan, establish the economic development project area, and authorize tax increment SB0397 EngrossedEnrolled - 631 - LRB097 04209 HLH 44248 b setoffallocation arisesfinancing isfor satisfied.such economic development project area.

TheAny housingordinance authorityadopted which approves an economic development plan shall promptlycontain notifyfindings that the Departmentdeveloper ofor Revenueany of aits reductionsuccessor entities and its subsidiaries economic development project shall create or retain not less than 4,250 2,000 full-time equivalent jobs, that private investment in an amount not less than $100,000,000 shall occur in the delinquenteconomic debt.development project area, that the economic development project will encourage the increase of commerce and industry within the State, thereby reducing the evils attendant upon unemployment and increasing opportunities for personal income, and that the economic development project will increase or maintain the property, sales and income tax bases of the municipality and of the State.

(2)Any Uponordinance receivingadopted thewhich certificationestablishes ofan theeconomic housingdevelopment authorityproject ofarea theshall amountcontain of the delinquentboundaries debt, the Department of Revenuesuch shallarea determineby iflegal thedescription debtorand, iswhere duepossible, aby refund.street location.

IfAny ordinance adopted which authorizes tax increment allocation financing shall provide that the debtorad isvalorem duetaxes, aif refundany, ofarising morefrom thanthe alevies toleranceupon amounttaxable asreal determinedproperty in such economic development project area by thetaxing Departmentdistricts ofand Revenue,tax rates determined in the Departmentmanner provided in subsection (b) of RevenueSection shall6 setof offthis theAct delinquenteach debtyear againstafter the amounteffective date of the refund.ordinance until economic development project costs and all municipal obligations financing economic development project costs incurred under this Act have been paid shall be divided as follows:

TheSB0397 DepartmentEnrolled - 32 - LRB097 04209 HLH 44248 b (1) That portion of Revenuetaxes maylevied retainupon aneach amounttaxable notlot, block, tract or parcel of real property which is attributable to exceedthe $25lower of the current equalized assessed value or the initial equalized assessed value of each refundsuch settaxable offlot, toblock, defraytract itsor administrativeparcel expenses,of real property in the economic development project area shall be allocated to and thatwhen amountcollected mayshall be addedpaid by the county collector to the debt.respective affected taxing districts in the manner required by law in the absence of the adoption of tax increment allocation financing.

Apportionment(2) That portion, if any, of such taxes which is notattributable requiredto the increase in the casecurrent equalized assessed valuation of aeach refundtaxable resultinglot, fromblock, filingtract or parcel of real property in the economic development project area over and above the initial equalized assessed value of each property in the economic development project area shall be allocated to and when collected shall be paid to the municipal treasurer who shall deposit such taxes into a jointspecial return.fund called the special tax allocation fund of the municipality for the purpose of paying economic development project costs and obligations incurred in the payment thereof.

A(f) personAfter a municipality has noby propertyordinance rightapproved oran propertyeconomic interestdevelopment inplan aand refundestablished untilan alleconomic amountsdevelopment dueproject area, the Stateplan may be amended and housingthe authoritiesboundaries areof paid.the area may be altered only as herein provided.

TheAmendments Departmentwhich (1) alter the exterior boundaries of Revenuean shallSB0397 considerEnrolled a- delinquent33 debt- andLRB097 debtor04209 listHLH provided44248 byb aeconomic housingdevelopment authorityproject asarea, correct(2) andsubstantially affect the Departmentgeneral land uses established pursuant to the economic development plan, (3) substantially change the nature of Revenuethe iseconomic notdevelopment liableproject, for(4) achange wrongfulthe general description of any proposed developer, user, or impropertenant setoff.of any property to be located or improved within the economic development project area, or (5) change the description of the type, class and number of employees to be employed in the operation of the facilities to be developed or improved within the economic development project area, shall be made only after notice and hearing pursuant to the procedures set forth in this Section.

(f)Amendments Noticewhich do not (1) alter the boundaries of intentionthe economic development project area, (2) substantially affect the general land uses established in the economic development plan, (3) substantially change the nature of the economic development project, (4) change the general description of any proposed developer, user, or tenant of any property to setbe offlocated debt;or improved within the economic development project area, or (5) change the description of the type, class and number of employees to be employed in the operation of the facilities to be developed or improved within the economic development project area may be made without further hearing, provided that the municipality shall give notice of any amendment by mail to the Department and to each taxing district and by publication in a newspaper or newspapers of general circulation within the affected taxing districts.

form,SB0397 deliveryEnrolled - 34 - LRB097 04209 HLH 44248 b Such notice by mail and presumption.by publication shall each occur not later than 10 days following the adoption by ordinance of any amendments.

The(g) noticeExtension of intentioneconomic todevelopment setproject offarea; must be given by mailing the notice, with postage prepaid, addressed to the debtor at the address provided to the housing authority when the debt was incurred or at the debtor's last known address.

Ifallocations; SB0397 Engrossed - 7 - LRB097 04209 HLH 44248 b the notice is returned to the housing authority as undeliverable or the housing authority has any reason to believe the debtor did not receive the notice, the housing authority shall obtain the last known address of the debtor from the Department of Revenue and resend the notice.

Thepayment giving of theoutstanding noticeclaims; by mail is complete upon mailing the notice or resending the notice if the notice is returned to the housing authority as undeliverable or the housing authority has any reason to believe the debtor did not receive the notice.

Achanges certificationin byequalized theassessed housingvaluation. authority that the notice has been sent is presumptive proof that the requirements as to notice are met, even if the notice actually has not been received by the debtor.

The(1) noticeNotwithstanding mustanything includeto the contrary set forth in this Act, upon the effective date of this amendatory Act of the 97th General Assembly, the duration of any existing economic development plan created pursuant to this Act is extended to the duration permitted under this subsection, up to a statementmaximum substantiallyduration asof follows:15 years.

"According(2) toFor ourthe records,purposes youof owethis theSection, (housingreal authority)estate ataxes debtpaid inon property within the amounteconomic ofdevelopment (amountproject ofarea during calendar year 2013 and remitted to the debt),developer plusand interest,the iftaxing applicable,districts forin (type2014 ofshall debt).be the "base amount".

YouBeginning arewith herebyreal notifiedestate oftaxes theremitted (housingin authority's)2014, intentionfor toany submiteconomic thisdevelopment debtplan toextended theby Illinoisoperation Department of Revenueitem to(1) beof setthis offsubsection against(g), youruntil individualsuch incometime taxas refundsall untilexisting theobligations, debtas that term is paiddefined in full.item (5) of this subsection (g), have been satisfied, the allocation of the special tax allocation fund shall be as follows:

Pursuant(A) toAll Sectionreceipts 8.1dup ofto the Housingfirst Authorities$350,000 Act,shall Sectionbe 2505-660maintained ofby the Departmentmunicipality ofin Revenuean Lawescrow ofaccount theto Civilbe Administrativeused Codesolely offor Illinois,(i) andexpenses Sectionrelating 911.3to of the Illinoisreports Incomerequired Taxby Act,Section this4.7 amount,of plusthis $25Act inand administrative(ii) costs,legal willexpenses beSB0397 deductedEnrolled from- your35 Illinois- individualLRB097 income04209 taxHLH refunds44248 unlessb youincurred fullyin satisfydefense thisof SB0397any Engrossedcivil -action 8brought -against LRB097the 04209municipality HLHrelating 44248to b debt with the (housingeconomic authority).development agreement.

IfThe youescrow fileaccount ashall joint return with your spouse, this amount will be deductedwithin from the totalscope jointof refunds without regard to which spouse incurred the debtannual oraudit actuallyprovided withheldin theSection taxes."4.7 (g)of Agreements;this Act.

creditEach December 31 following a deposit into the escrow account, any unobligated balance in the escrow account shall be distributed to debtor'sthe obligationtaxing districts in the same manner and proportion as the most recent distribution by housingthe authority;county collector to the taxing districts in the economic development project area.

notification(B) ofAfter housingthe authorityallocation required pursuant to debtorparagraph (A) of setoff.this item (2), the next $5,000,000 of the receipts shall be allocated to the municipality.

(1)(C) AAfter housingthe authorityallocations mayrequired enterpursuant intoto anparagraphs agreement(A) withand the(B) Department of Revenuethis toitem establish(2), a55% programof for the purposeremaining ofreceipts collectingshall certainbe delinquentallocated debts.to the developer.

The(D) purposeAfter shallthe beallocations torequired intercept,pursuant into wholeparts or(A) inand part,(B) Stateof incomethis taxitem refunds(2), due45% of the personsremaining whoreceipts oweshall delinquentbe debtsallocated to the housingtaxing authoritydistricts inlocated orderwithin tothe satisfyeconomic delinquentdevelopment debts.project area, excluding the municipality.

The(3) agreementFor shallreal include,estate buttaxes maypaid notin be2012 limitedand to,remitted ato certification by the housingdeveloper authorityand that the debttaxing claimsdistricts forwardedin to2013 theand Departmentprior ofyears, Revenuethe areallocation valid,formula thatcontained reasonablein effortsany haveeconomic beendevelopment madeplan toin notifyeffect personsimmediately ofprior to the delinquencyeffective date of thethis debts,amendatory andAct thatof the delinquent97th debtsGeneral haveAssembly beenshall reducedapply. to judgment in a final court order.

TheSB0397 agreementEnrolled shall- include36 provisions- forLRB097 payment04209 ofHLH 44248 b (4) Beginning with real estate taxes paid in 2014 and remitted to the interceptdeveloper byand the Departmenttaxing ofdistricts Revenuein to2015 and each year thereafter, if the housingtaxes authority.paid within the economic development project area change from the base amount, the allocation of the special tax allocation fund shall be as follows:

The(A) agreementIf maythe alsoamount includeof provisionscurrent toyear allowtaxes paid is less than the Departmentbase amount, then the administrative escrow account shall receive the first $350,000 of Revenuereceipts, the municipality shall receive the next $5,000,000 of receipts, the developer shall receive 55% of receipts over $5,350,000, and the remaining 45% of receipts over $5,350,000 shall be distributed to recoverthe itstaxing costdistricts for(excluding administeringthe municipality) in the program.same manner and proportion as the most recent distribution by the county collector to those taxing districts in the economic development project area.

Intercepts(B) madeIf pursuantthe toamount thisof Sectioncurrent year taxes paid is greater than the base amount, then 75% of the increase in real estate tax receipts shall notbe interferepayable withto the collectiondeveloper and the remaining 25% of debtsthe relatedincrease in real estate tax receipts shall be distributed to childthe support.taxing districts (including the municipality) pursuant to the formula in this subsection.

During(5) theAfter collection(i) ofall existing obligations and interest thereon have been satisfied, (ii) any excess moneys have been SB0397 EngrossedEnrolled - 937 - LRB097 04209 HLH 44248 b debtsdistributed underpursuant to this Section,subsection, whenand there(iii) arefinal 2closing orof morethe debtbooks claimsand certifiedrecords toof the Departmenteconomic ofdevelopment Revenueproject atarea has occurred, the samemunicipality time,shall priorityadopt ofan collectionordinance shalldissolving bethe asspecial providedtax inallocation Sectionfund 911.3for the economic development project area and terminating the designation of the Illinoiseconomic Incomedevelopment Taxproject Act.area as an economic development project area.

(2)All Uponexcess receiptmoneys byin athe housingspecial authoritytax ofallocation proceedsfund collectedshall onbe itsdistributed behalfto by the Departmenttaxing ofdistricts Revenue,in the housingsame authoritymanner shalland creditproportion as the debtor'smost obligationrecent anddistribution shallby notify the debtorcounty incollector writingto ofthose thetaxing amountdistricts ofin the setoff.economic development project area.

(3)For Thethe Departmentpurpose of Revenuethis maysubsection add(g), an"existing administrativeobligations" feemeans (i) the obligations of nothe moredeveloper thanthat $25existed before the base year, as certified by a sworn affidavit of the principal financial officer of the developer attesting that the amounts set forth are true and correct, (ii) obligations of the municipality relating to the delinquentpayment debt.of the obligations of the developer, and (iii) any amounts payable by taxing districts to the developer for property taxes determined to have been overpaid, to the extent that those amounts payable have been carried forward as an interest bearing note due to the developer.

ThisAll feeobligations of the developer due and payable shall be usedprocessed byand paid in the Departmentorder ofreceived, Revenuewith tothe coveroldest anynotes administrativeto costsbe pursuantprocessed toand thispaid Section.first.

(h)Beginning InformationJanuary from1, Department2012, ofall Revenueoutstanding tointerest bebearing usednotes onlyshall bybear housinginterest authorityat forthe collectionrate purposes;of 4% until paid.

penaltiesSB0397 Enrolled - 38 - LRB097 04209 HLH 44248 b (h) Beginning on the effective date of this amendatory Act of the 97th General Assembly, the taxing districts shall meet annually 180 days after the close of the municipal fiscal year, or as soon as the economic development project audit for disclosure.that fiscal year becomes available, to review the effectiveness and status of the economic development project area up to that date.

(1)(Source: The exchange of information among the Department of Revenue, housing authority, and the debtor pursuant to this Section is lawful.

(2)P.A. The information obtained by a housing authority from the Department of Revenue in accordance with the exemption allowed by paragraph (1) may be used by the housing authority only in the pursuit of its debt collection duties and practices.

A86-38.) person(20 employedILCS by620/4.5 ornew) formerlySec. employed by the housing authority who knowingly discloses the information for another purpose commits a SB0397 Engrossed - 10 - LRB097 04209 HLH 44248 b Class A misdemeanor.

(i)4.5. Indemnification of Department of Revenue by housing authority.

HousingRecapture. authorities shall indemnify the Department of Revenue against any injuries, actions, liabilities, or proceedings arising from performance under the provisions of this Section.

(j)(a) DepartmentIn the event that the developer terminates all of Revenueits rules,operations forms,and vacates the redevelopment area within 60 months after the effective date of this amendatory Act of the 97th General Assembly, the developer shall be required to remit to the Department an amount equal to the payments disbursed to the developer in 2014 and proceduressubsequent permitted.years under the Agreement.

TheWithin Department30 ofdays Revenueafter mayreceipt, promulgatethe rulesDepartment andshall prescriberemit formssuch andfunds procedures necessary to implementthe thiscounty Section.collector.

The county collector shall thereafter make distribution to the respective taxing districts in the same manner and proportion as the most recent distribution by the county collector to those taxing districts of real property taxes from real property in the economic development project area.

(b) In the event the developer fails to maintain 4,250 jobs at any time before the termination of the economic development SB0397 Enrolled - 39 - LRB097 04209 HLH 44248 b project area, except as provided in subsection (c), the developer shall forfeit an amount of its allocations from the special tax allocation fund for that time period in which the developer failed to maintain 4,250 jobs.

The amount forfeited shall equal the percentage of the year that the developer failed to maintain 4,250 jobs multiplied by the amount the developer would have received if they maintained 4,250 jobs for the entire year.

Any funds that are forfeited shall be distributed to the taxing districts in the same manner and proportion as the most recent distribution by the county collector to those taxing districts (inclusive of the municipality) in the economic development project area.

(c) In the event that the developer maintains no jobs at any time before the termination of the economic development project area, the municipality shall adopt an ordinance dissolving the special tax allocation fund for the economic development project area and terminating the economic development project area as an economic development project area.

That ordinance shall be adopted no later than one year after the date that the developer maintains no jobs within the economic development project area.

All excess moneys in the special tax allocation fund shall be distributed to the taxing districts in the same manner and proportion as the most recent distribution by the county collector to those taxing districts in the economic development project area.

SB0397 Enrolled - 40 - LRB097 04209 HLH 44248 b (20 ILCS 620/4.7 new) Sec.

4.7.

Municipal reports.

After the effective date of this amendatory Act of the 97th General Assembly, a municipality shall submit in an electronic format all of the following information for each economic development project area (i) to the State Comptroller and (ii) to all taxing districts overlapping the economic development project area no later than 180 days after the close of each municipal fiscal year or as soon thereafter as the audited financial statements become available:

(1) Any amendments to the economic development plan or the economic development project area.

(2) Audited financial statements of the special tax allocation fund once a cumulative total of $100,000 has been deposited into the fund.

(3) Certification of the Chief Executive Officer of the municipality that the municipality has complied with all of the requirements of this Act during the preceding fiscal year.

(4) An opinion of legal counsel that the municipality is in compliance with this Act.

(5) An analysis of the special tax allocation fund that sets forth:

(A) the balance in the special tax allocation fund at the beginning of the fiscal year;

(B) all amounts deposited in the special tax SB0397 Enrolled - 41 - LRB097 04209 HLH 44248 b allocation fund by source;

(C) an itemized list of all expenditures from the special tax allocation fund by category of permissible economic development project cost;

and (D) the balance in the special tax allocation fund at the end of the fiscal year, including a breakdown of that balance by source and a breakdown of that balance identifying any portion of the balance that is required, pledged, earmarked, or otherwise designated for payment of or securing of obligations and anticipated economic development project costs;

any portion of that ending balance that has not been identified or is not identified as being required, pledged, earmarked, or otherwise designated for payment of or securing of obligations or anticipated economic development project costs shall be designated as surplus as set forth in Section 8 of this Act.

(6) A description of all property purchased by the municipality within the economic development project area including:

(A) street address;

(B) approximate size or description of property;

(C) purchase price;

and (D) the seller of the property.

(7) A statement setting forth all activities undertaken in furtherance of the objectives of the economic SB0397 Enrolled - 42 - LRB097 04209 HLH 44248 b development plan, including:

(A) any project implemented in the preceding fiscal year;

(B) a description of the economic development activities undertaken;

(C) a description of any agreements entered into by the municipality with regard to the disposition or redevelopment of any property within the economic development project area;

(D) additional information on the use of all funds received under this Act and steps taken by the municipality to achieve the objectives of the economic development plan;

(E) information regarding contracts that the municipality's tax increment advisors or consultants have entered into with entities or persons that have received, or are receiving, payments financed by tax increment revenues produced by the same economic development project area;

and (F) a review of public and, to the extent possible, private investment actually undertaken on or after the effective date of this amendatory Act of the 97th General Assembly and prior to the date of the report and estimated to be undertaken during the following fiscal year;

this review shall, on a project by project basis, set forth the estimated amounts of public and SB0397 Enrolled - 43 - LRB097 04209 HLH 44248 b private investment incurred after the effective date of this amendatory Act of the 97th General Assembly and provide the ratio of private investment to public investment to the date of the report and as estimated to the completion of the economic development project.

(8) With regard to any obligations issued by the municipality:

(A) copies of any official statements;

and (B) an analysis prepared by a financial advisor or underwriter setting forth:

(i) the nature and term of those obligations;

and (ii) projected debt service including required reserves and debt coverage.

(9) For special tax allocation funds that have experienced cumulative deposits of incremental tax revenues of $100,000 or more, a certified audit report reviewing compliance with this Act performed by an independent certified public accountant licensed by the authority of the State of Illinois.

The financial portion of the audit must be conducted in accordance with Standards for Audits of Governmental Organizations, Programs, Activities, and Functions adopted by the Comptroller General of the United States (1981), as amended, or the standards specified by Section 8-8-5 of the Illinois Municipal Auditing Law of the Illinois Municipal Code.

The audit report shall contain a letter from the independent certified public accountant indicating compliance or SB0397 Enrolled - 44 - LRB097 04209 HLH 44248 b noncompliance with the requirements of subsection (e) of Section 3 of this Act.

(10) A list of all intergovernmental agreements in effect during the fiscal year to which the municipality is a party and an accounting of any moneys transferred or received by the municipality during that fiscal year pursuant to those intergovernmental agreements.

(20 ILCS 620/5) (from Ch.

67 1/2, par.

1005) Sec.

5.

Submission to Department;

certification by Department;

limitation on number of permissible economic development project areas.

(a) The municipality shall submit certified copies of any ordinances adopted approving an economic development plan, establishing an economic development project area, and authorizing tax increment allocation financing for such economic development project area to the Department, together with (1) a map of the economic development project area, (2) a copy of the economic development plan as approved, (3) an analysis, and any supporting documents and statistics, demonstrating that the developer or any of its successor entities and its subsidiaries economic development project shall create or retain not less than 4,250 2,000 full-time equivalent jobs and that private investment in the amount of not less than $100,000,000 shall occur in the economic development project area, (4) an estimate of the economic impact of the economic development project and SB0397 Enrolled - 45 - LRB097 04209 HLH 44248 b the use of tax increment allocation financing upon the revenues of the municipality and the affected taxing districts, (5) a record of all public hearings had in connection with the establishment of the economic development project area, and (6) such other information as the Department by regulation may require.

(b) Upon receipt of an application from a municipality the Department shall review the application to determine whether the economic development project area qualifies as an economic development project area under this Act.

At its discretion, the Department may accept or reject the application or may request such additional information as it deems necessary or advisable to aid its review.

If any such area is found to be qualified to be an economic development project area, the Department shall approve and certify such economic development project area and shall provide written notice of its approval and certification to the municipality and to the county clerk.

In determining whether an economic development project area shall be approved and certified, the Department shall consider (1) whether, without public intervention, the State would suffer substantial economic dislocation, such as relocation of a commercial business or industrial or manufacturing facility to another state, territory or country, or would not otherwise benefit from private investment offering substantial employment opportunities and economic growth, and (2) the impact on the revenues of the municipality and the affected SB0397 Enrolled - 46 - LRB097 04209 HLH 44248 b taxing districts of the use of tax increment allocation financing in connection with the economic development project.

(c) On or before the date which is 18 months following the date on which this Act becomes law, the Department shall submit to the General Assembly a report detailing the number of economic development project areas it has approved and certified, the number and type of jobs created or retained therein, the aggregate amount of private investment therein, the impact on the revenues of municipalities and affected taxing districts of the use of tax increment allocation financing therein, and such additional information as the Department may determine to be relevant.

On or after the date which is 20 months following the date on which this Act becomes law the authority granted hereunder to municipalities to establish economic development project areas and to adopt tax increment allocation financing in connection therewith and to the Department to approve and certify economic development project areas shall expire unless the General Assembly shall have authorized municipalities and the Department to continue to exercise the powers granted to them hereunder.

(Source:

P.A.

86-38.) (20 ILCS 620/8) (from Ch.

67 1/2, par.

1008) Sec.

8.

Issuance of obligations for economic development project costs.

Obligations secured by the special tax allocation fund provided for in Section 7 of this Act for an SB0397 Enrolled - 47 - LRB097 04209 HLH 44248 b economic development project area may be issued to provide for economic development project costs.

Those obligations, when so issued, shall be retired in the manner provided in the ordinance authorizing the issuance of the obligations by the receipts of taxes levied as specified in Section 6 of this Act against the taxable property included in the economic development project area and by other revenue designated or pledged by the municipality.

A municipality may in the ordinance pledge all or any part of the funds in and to be deposited in the special tax allocation fund created pursuant to Section 7 of this Act to the payment of the economic development project costs and obligations.

Whenever a municipality pledges all of the funds to the credit of a special tax allocation fund to secure obligations issued or to be issued to pay economic development project costs, the municipality may specifically provide that funds remaining to the credit of such special tax allocation fund after the payment of such obligations shall be accounted for annually and shall be deemed to be "surplus" funds, and such "surplus" funds shall be distributed as hereinafter provided.

Whenever a municipality pledges less than all of the monies to the credit of a special tax allocation fund to secure obligations issued or to be issued to pay economic development project costs, the municipality shall provide that monies to the credit of the special tax allocation fund and not subject to such pledge or otherwise encumbered or required for payment of contractual SB0397 Enrolled - 48 - LRB097 04209 HLH 44248 b obligations for specific economic development project costs shall be calculated annually and shall be deemed to be "surplus" funds, and such "surplus" funds shall be distributed as hereinafter provided.

All funds to the credit of a special tax allocation fund which are deemed to be "surplus" funds shall be distributed annually within 180 days of the close of the municipality's fiscal year by being paid by the municipal treasurer to the county collector.

The county collector shall thereafter make distribution to the respective taxing districts in the same manner and proportion as the most recent distribution by the county collector to those taxing districts of real property taxes from real property in the economic development project area.

Without limiting the foregoing in this Section the municipality may, in addition to obligations secured by the special tax allocation fund, pledge for a period not greater than the term of the obligations towards payment of those obligations any part or any combination of the following:

(i) net revenues of all or part of any economic development project;

(ii) taxes levied and collected on any or all property in the municipality, including, specifically, taxes levied or imposed by the municipality in a special service area pursuant to "An Act to provide the manner of levying or imposing taxes for the provision of special services to areas within the boundaries of home rule units and non-home rule municipalities and counties", approved September 21, 1973, as now or hereafter SB0397 Enrolled - 49 - LRB097 04209 HLH 44248 b amended;

(iii) the full faith and credit of the municipality;

(iv) a mortgage on part or all of the economic development project;

or (v) any other taxes or anticipated receipts that the municipality may lawfully pledge.

Such obligations may be issued in one or more series bearing interest at such rate or rates as the corporate authorities of the municipality shall determine by ordinance, which rate or rates may be variable or fixed, without regard to any limitations contained in any law now in effect or hereafter adopted.

Such obligations shall bear such date or dates, mature at such time or times not exceeding 38 20 years from their respective dates, but in no event exceeding 38 23 years from the date of establishment of the economic development project area, be in such denomination, be in such form, whether coupon, registered or book-entry, carry such registration, conversion and exchange privileges, be executed in such manner, be payable in such medium of payment at such place or places within or without the State of Illinois, contain such covenants, terms and conditions, be subject to redemption with or without premium, be subject to defeasance upon such terms, and have such rank or priority, as such ordinance shall provide.

Obligations issued pursuant to this Act may be sold at public or private sale at such price as shall be determined by the corporate authorities of the municipalities.

Such obligations may, but need not, be issued utilizing the provisions of any one or more of the omnibus bond Acts specified in Section 1.33 SB0397 Enrolled - 50 - LRB097 04209 HLH 44248 b of "An Act to revise the law in relation to the construction of the statutes", approved March 5, 1874, as now or hereafter amended.

No referendum approval of the electors shall be required as a condition to the issuance of obligations pursuant to this Act except as provided in this Section.

Whenever a municipality issues bonds for the purpose of financing economic development project costs, the municipality may provide by ordinance for the appointment of a trustee, which may be any trust company within the State, and for the establishment of the funds or accounts to be maintained by such trustee as the municipality shall deem necessary to provide for the security and payment of the bonds.

If the municipality provides for the appointment of a trustee, the trustee shall be considered the assignee of any payments assigned by the municipality pursuant to the ordinance and this Section.

Any amounts paid to the trustee as assignee shall be deposited in the funds or accounts established pursuant to the trust agreement, and shall be held by the trustee in trust for the benefit of the holders of the bonds, and the holders shall have a lien on and a security interest in those bonds or accounts so long as the bonds remain outstanding and unpaid.

Upon retirement of the bonds, the trustee shall pay over any excess amounts held to the municipality for deposit in the special tax allocation fund.

In the event the municipality authorizes the issuance of obligations pursuant to the authority of this Act secured by SB0397 Enrolled - 51 - LRB097 04209 HLH 44248 b the full faith and credit of the municipality, or pledges ad valorem taxes pursuant to clause (ii) of the second paragraph of this Section, which obligations are other than obligations which may be issued under home rule powers provided by Article VII, Section 6 of the Illinois Constitution or which ad valorem taxes are other than ad valorem taxes which may be pledged under home rule powers provided by Article VII, Section 6 of the Illinois Constitution or which are levied in a special service area pursuant to "An Act to provide the manner of levying or imposing taxes for the provision of special services to areas within the boundaries of home rule units and non-home rule municipalities and counties", approved September 21, 1973, as now or hereafter amended, the ordinance authorizing the issuance of those obligations or pledging those taxes shall be published within 10 days after the ordinance has been adopted, in one or more newspapers having a general circulation within the municipality.

The publication of the ordinance shall be accompanied by a notice of (1) the specific number of voters required to sign a petition requesting the question of the issuance of the obligations or pledging such ad valorem taxes to be submitted to the electors;

(2) the time within which the petition must be filed;

and (3) the date of the prospective referendum.

The municipal clerk shall provide a petition form to any individual requesting one.

If no petition is filed with the municipal clerk, as hereinafter provided in this Section, within 21 days after the SB0397 Enrolled - 52 - LRB097 04209 HLH 44248 b publication of the ordinance, the ordinance shall be in effect.

However, if within that 21 day period a petition is filed with the municipal clerk, signed by electors numbering not less than 15% of the number of electors voting for the mayor or president at the last general municipal election, asking that the question of issuing obligations using full faith and credit of the municipality as security for the cost of paying for economic development project costs, or of pledging such ad valorem taxes for the payment of those obligations, or both, be submitted to the electors of the municipality, the municipality shall not be authorized to issue obligations of the municipality using the full faith and credit of the municipality as security or pledging such ad valorem taxes for the payment of those obligations, or both, until the proposition has been submitted to and approved by a majority of the voters voting on the proposition at a regularly scheduled election.

The municipality shall certify the proposition to the proper election authorities for submission in accordance with the general election law.

The ordinance authorizing the obligations may provide that the obligations shall contain a recital that they are issued pursuant to this Act, which recital shall be conclusive evidence of their validity and of the regularity of their issuance.

In the event the municipality authorizes issuance of obligations pursuant to this Act secured by the full faith and SB0397 Enrolled - 53 - LRB097 04209 HLH 44248 b credit of the municipality, the ordinance authorizing the obligations may provide for the levy and collection of a direct annual tax upon all taxable property within the municipality sufficient to pay the principal thereof and interest thereon as it matures, which levy may be in addition to and exclusive of the maximum of all other taxes authorized to be levied by the municipality, which levy, however, shall be abated to the extent that monies from other sources are available for payment of the obligations and the municipality certifies the amount of those monies available to the county clerk.

A certified copy of the ordinance shall be filed with the county clerk of each county in which any portion of the municipality is situated, and shall constitute the authority for the extension and collection of the taxes to be deposited in the special tax allocation fund.

A municipality may also issue its obligations to refund, in whole or in part, obligations theretofore issued by the municipality under the authority of this Act, whether at or prior to maturity.

However, the last maturity of the refunding obligations shall not be expressed to mature later than 38 23 years from the date of the ordinance establishing the economic development project area.

In the event a municipality issues obligations under home rule powers or other legislative authority, the proceeds of which are pledged to pay for economic development project costs, the municipality may, if it has followed the procedures SB0397 Enrolled - 54 - LRB097 04209 HLH 44248 b in conformance with this Act, retire those obligations from funds in the special tax allocation fund in amounts and in such manner as if those obligations had been issued pursuant to the provisions of this Act.

No obligations issued pursuant to this Act shall be regarded as indebtedness of the municipality issuing those obligations or any other taxing district for the purpose of any limitation imposed by law.

Obligations issued pursuant to this Act shall not be subject to the provisions of "An Act to authorize public corporations to issue bonds, other evidences of indebtedness and tax anticipation warrants subject to interest rate limitations set forth therein", approved May 26, 1970, as amended.

(Source:

P.A.

86-38.) (20 ILCS 620/9) (from Ch.

67 1/2, par.

1009) Sec.

9.

Powers of municipalities.

In addition to powers which it may now have, any municipality has the power under this Act:

(a) To make and enter into all contracts necessary or incidental to the implementation and furtherance of an economic development plan.

(b) Within an economic development project area, to acquire by purchase, donation, lease or eminent domain, and to own, convey, lease, mortgage or dispose of land and other real or SB0397 Enrolled - 55 - LRB097 04209 HLH 44248 b personal property or rights or interests therein;

and to grant or acquire licenses, easements and options with respect thereto, all in the manner and at such price the municipality determines is reasonably necessary to achieve the objectives of the economic development project.

No conveyance, lease, mortgage, disposition of land or other property acquired by the municipality, or agreement relating to the development of property, shall be made or executed except pursuant to prior official action of the municipality.

No conveyance, lease, mortgage or other disposition of land, and no agreement relating to the development of property, shall be made without making public disclosure of the terms and disposition of all bids and proposals submitted to the municipality in connection therewith.

(c) To clear any area within an economic development project area by demolition or removal of any existing buildings, structures, fixtures, utilities or improvements, and to clear and grade land.

(d) To install, repair, construct, reconstruct or relocate public streets, public utilities, and other public site improvements within or without an economic development project area which are essential to the preparation of an economic development project area for use in accordance with an economic development plan.

(e) To renovate, rehabilitate, reconstruct, relocate, repair or remodel any existing buildings, improvements, and SB0397 Enrolled - 56 - LRB097 04209 HLH 44248 b fixtures within an economic development project area.

(f) To construct, acquire, and operate public improvements, including but not limited to, publicly owned buildings, structures, works, utilities or fixtures within any economic development project area, subject to the restrictions of item (5) of subsection (e) of Section 3 of this Act.

(g) To issue obligations as provided in this Act provided.

(h) To fix, charge and collect fees, rents and charges for the use of any building, facility or property or any portion thereof owned or leased by the municipality within an economic development project area.

(i) To accept grants, guarantees, donations of property or labor, or any other thing of value for use in connection with an economic development project.

(j) To pay or cause to be paid economic development project costs.

Any payments to be made by the municipality to developers or other nongovernmental persons for economic development project costs incurred by such developer or other nongovernmental person shall be made only pursuant to the prior official action of the municipality evidencing an intent to pay or cause to be paid such economic development project costs.

A municipality is not required to obtain any right, title or interest in any real or personal property in order to pay economic development project costs associated with such property.

The municipality shall adopt such accounting procedures as may be necessary to determine that such economic SB0397 Enrolled - 57 - LRB097 04209 HLH 44248 b development project costs are properly paid.

(k) To exercise any and all other powers necessary to effectuate the purposes of this Act.

(l) To create a commission of not less than 5 or more than 15 persons to be appointed by the mayor or president of the municipality with the consent of the majority of the corporate authorities of the municipality.

Members of a commission shall be appointed for initial terms of 1, 2, 3, 4, and 5 years, respectively, in such numbers as to provide that the terms of not more than 1/3 of all such members shall expire in any one year.

Their successors shall be appointed for a term of 5 years.

The commission, subject to approval of the corporate authorities, may exercise the powers enumerated in this Section.

The commission shall also have the power to hold the public hearings required by this Act and make recommendations to the corporate authorities concerning the approval of economic development plans, the establishment of economic development project areas, and the adoption of tax increment allocation financing for economic development project areas.

(Source:

P.A.

91-357, eff.

7-29-99.) (20 ILCS 620/11) (from Ch.

67 1/2, par.

1011) Sec.

11.

Payment of project costs;

revenues from governmental municipal property.

Revenues received by a taxing district municipality from any property, building or facility owned, leased or operated by the taxing district municipality SB0397 Enrolled - 58 - LRB097 04209 HLH 44248 b or any agency or authority established by the taxing district municipality may be used to pay economic development project costs, or reduce outstanding obligations of the taxing district municipality incurred under this Act for economic development project costs.

The taxing district municipality may place those revenues in the special tax allocation fund which shall be held by the municipal treasurer of the taxing district or other person designated by the taxing district municipality.

Revenue received by a taxing district the municipality from the sale or other disposition of real or personal property or rights or interests therein acquired by a taxing district the municipality with the proceeds of obligations funded by tax increment allocation financing may be used to acquire and operate other governmental property that is within the economic development project area or that provides services within the economic development project area, subject to the restrictions of item (5) of subsection (e) of Section 3 of this Act.

shall be deposited by the municipality in the special tax allocation fund.

(Source:

P.A.

86-38.) Section 15-7.

The New Markets Development Program Act is amended by changing Section 50 as follows:

(20 ILCS 663/50) Sec.

50.

Sunset.

For fiscal years following fiscal year SB0397 Enrolled - 59 - LRB097 04209 HLH 44248 b 2017 2012, qualified equity investments shall not be made under this Act unless reauthorization is made pursuant to this Section.

For all fiscal years following fiscal year 2017 2012, unless the General Assembly adopts a joint resolution granting authority to the Department to approve qualified equity investments for the Illinois new markets development program and clearly describing the amount of tax credits available for the next fiscal year, or otherwise complies with the provisions of this Section, no qualified equity investments may be permitted to be made under this Act.

The amount of available tax credits contained in such a resolution shall not exceed the limitation provided under Section 20.

Nothing in this Section precludes a taxpayer who makes a qualified equity investment prior to the expiration of authority to make qualified equity investments from claiming tax credits relating to that qualified equity investment for each applicable credit allowance date.

(Source:

P.A.

95-1024, eff.

12-31-08.) Section 15-10.

The Illinois Income Tax Act is amended by changing Sections 201, 207, 250, 304, 804, and 1501 as follows:

(35 ILCS 5/201) (from Ch.

120, par.

2-201) Sec.

201.

Tax Imposed.

(a) In general.

A tax measured by net income is hereby imposed on every individual, corporation, trust and estate for SB0397 Enrolled - 60 - LRB097 04209 HLH 44248 b 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.

(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 SB0397 Enrolled - 61 - LRB097 04209 HLH 44248 b 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 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 SB0397 Enrolled - 62 - LRB097 04209 HLH 44248 b 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 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.

SB0397 Enrolled - 63 - LRB097 04209 HLH 44248 b (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 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 SB0397 Enrolled - 64 - LRB097 04209 HLH 44248 b 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 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.

SB0397 Enrolled - 65 - LRB097 04209 HLH 44248 b (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 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 SB0397 Enrolled - 66 - LRB097 04209 HLH 44248 b (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).

This subsection (d-1) is exempt from the provisions of Section 250.

(e) Investment credit.

A taxpayer shall be allowed a credit SB0397 Enrolled - 67 - LRB097 04209 HLH 44248 b 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 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 SB0397 Enrolled - 68 - LRB097 04209 HLH 44248 b 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 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 SB0397 Enrolled - 69 - LRB097 04209 HLH 44248 b 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 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 SB0397 Enrolled - 70 - LRB097 04209 HLH 44248 b 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 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 SB0397 Enrolled - 71 - LRB097 04209 HLH 44248 b 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 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 SB0397 Enrolled - 72 - LRB097 04209 HLH 44248 b 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, 2018 2013, except for costs incurred pursuant to a binding contract entered into on or before December 31, 2018 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, 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 SB0397 Enrolled - 73 - LRB097 04209 HLH 44248 b 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.