SB 17 — SOUTHERN IL ECON DEV AUTH ACT

The Governor shall submit the certified amount to the General Assembly as soon as practicable, but no later than the end of the current State fiscal year.

(h) The State of Illinois pledges to and agrees with the holders of the bonds and notes of the Authority issued pursuant to this Section that the State will not limit or alter the rights and powers vested in the Authority by this Act so as to impair the terms of any contract made by the Authority with the holders of bonds or notes or in any way impair the rights and remedies of those holders until the bonds and notes, together with interest thereon, with interest on any unpaid installments of interest, and all costs and expenses in connection with any action or proceedings by or on behalf of the holders, are fully met and discharged.

In addition, the State pledges to and agrees with the holders of the bonds and notes of the Authority SB0017 Engrossed - 14 - LRB094 05351 MKM 35395 b issued pursuant to this Section that the State will not limit or alter the basis on which State funds are to be paid to the Authority as provided in this Act, or the use of such funds, so as to impair the terms of any such contract.

(i)(h) Not less than 30 days prior to the commitment to issue bonds, notes, or other evidences of indebtedness for the purpose of developing, constructing, acquiring, or improving housing or residential projects, as defined in this Act, the Authority shall provide notice to the Executive Director of the Illinois Housing Development Authority.

Section 45.5-45.

The creation of the Authority is in all respects for the benefit of the people of Illinois and for the improvement of their health, SB0017 Enrolled - 14 - LRB094 05351 MKM 35395 b safety, welfare, comfort, and security, and its purposes are public purposes.

The amount of such income that shall be SB0017 Engrossed - 15 - LRB094 05351 MKM 35395 b added and then subtracted on the Illinois income tax return of a taxpayer, subject to Section 203 of the Illinois Income Tax Act, from federal adjusted gross income or federal taxable income in computing Illinois base income shall be the interest net of any bond premium amortization.

Section 50.5-50.

(c) The Authority shall have power to develop, construct, and improve, either under its own direction or through collaboration with any approved applicant, or to acquire, through purchase or otherwise, any project, using for this SB0017 Enrolled - 15 - LRB094 05351 MKM 35395 b purpose the proceeds derived from its sale of revenue bonds, notes, or other evidences of indebtedness or governmental loans or grants and shall have the power to hold title to those projects in the name of the Authority.

(d) The Authority shall have the power to enter into intergovernmental agreements with the State of Illinois, the counties of Franklin, Perry, Randolph, Jackson, Williamson, Saline, Gallatin, Union, Johnson, Pope, Hardin, Alexander, Pulaski, or Massac, the Illinois Finance Authority, the Illinois Housing Development Authority, the United States government and any agency or instrumentality of the United States, any unit of local government located within the territory of the Authority, or any other unit of government to the extent allowed by Article VII, Section 10 of the Illinois SB0017 Engrossed - 16 - LRB094 05351 MKM 35395 b Constitution and the Intergovernmental Cooperation Act.

Section 55.5-60.

Enterprise zones.

The Authority may by ordinance designate a portion of the territorial jurisdiction of the Authority for certification as an Enterprise Zone under the Illinois Enterprise Zone Act in addition to any other enterprise zones which may be created under that Act, which area shall have all the privileges and rights of an Enterprise Zone pursuant to the Illinois Enterprise Zone Act, but which shall not be counted in determining the number of Enterprise Zones to be created in any year pursuant to that Act.

Section 60.

When any of the funds of the Authority shall be deposited by the treasurer in any such depository, the treasurer and the sureties on his official bond shall, to such extent, be exempt from liability for the loss of SB0017 Enrolled - 16 - LRB094 05351 MKM 35395 b any such deposited funds by reason of the failure, bankruptcy, or any other act or default of such depository;

provided that the Authority may accept assignments of collateral by any depository of its funds to secure such deposits to the same SB0017 Engrossed - 17 - LRB094 05351 MKM 35395 b extent and conditioned in the same manner as assignments of collateral are permitted by law to secure deposits of the funds of any city.

Section 65.5-65.

Section 70.5-70.

Section 75.5-75.

SectionARTICLE 999.10.

RIVER EDGE REDEVELOPMENT ZONE ACT Section 10-1.

This Article may be cited as the River Edge Redevelopment Zone Act, and references in this Article to "this Act" mean this Article.

Section 10-2.

Findings.

The General Assembly finds and declares that those municipalities adjacent to or surrounding river areas often lack critical tools to safely revive and redevelop environmentally-challenged properties that will SB0017 Enrolled - 17 - LRB094 05351 MKM 35395 b stimulate economic revitalization and create jobs in Illinois.

Environmentally-challenged properties adjacent to or surrounding Illinois rivers are a threat to the health, safety, and welfare of the people of this State.

Many of these environmentally-challenged properties adjacent to or surrounding rivers were former industrial areas that now, subject to appropriate environmental clean-up and remediation, would be ideal for office, residential, retail, hospitality, commercial, recreational, warehouse and distribution, and other economically productive uses.

The cost of the cleaning and remediation of these environmentally-challenged properties is often the primary obstacle to returning these properties to a safe and economically productive use.

Cooperative and continuous partnership among the State, through the Department of Commerce and Economic Opportunity and the Environmental Protection Agency, municipalities adjacent to or surrounding rivers, and the private sector is necessary to appropriately encourage the cost-effective cleaning and remediation of these environmentally-challenged properties in order to bring about a safe and economically productive use of the properties.

Therefore, it is declared to be the purpose of this Act to identify and initiate 2 pilot River Edge Redevelopment Zones to stimulate the safe and cost-effective re-use of environmentally-challenged properties adjacent to or surrounding rivers by means of tax incentives or grants.

Section 10-3.

Definitions.

As used in this Act:

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

"River Edge Redevelopment Zone" means an area of the State certified by the Department as a River Edge Redevelopment Zone pursuant to this Act.

"Designated zone organization" means an association or entity:

(1) the members of which are substantially all residents of the River Edge Redevelopment Zone or of the SB0017 Enrolled - 18 - LRB094 05351 MKM 35395 b municipality in which the River Edge Redevelopment Zone is located;

(2) the board of directors of which is elected by the members of the organization;

(3) that satisfies the criteria set forth in Section 501(c) (3) or 501(c) (4) of the Internal Revenue Code;

and (4) that exists primarily for the purpose of performing within the zone, for the benefit of the residents and businesses thereof, any of the functions set forth in Section 8 of this Act.

"Agency" means:

each officer, board, commission, and agency created by the Constitution, in the executive branch of State government, other than the State Board of Elections;

each officer, department, board, commission, agency, institution, authority, university, and body politic and corporate of the State;

each administrative unit or corporate outgrowth of the State government that is created by or pursuant to statute, other than units of local government and their officers, school districts, and boards of election commissioners;

and each administrative unit or corporate outgrowth of the above and as may be created by executive order of the Governor.

No entity is an "agency" for the purposes of this Act unless the entity is authorized by law to make rules or regulations.

"Rule" means each agency statement of general applicability that implements, applies, interprets, or prescribes law or policy, but does not include (i) statements concerning only the internal management of an agency and not affecting private rights or procedures available to persons or entities outside the agency, (ii) intra-agency memoranda, or (iii) the prescription of standardized forms.

Section 10-4.

Qualifications for River Edge Redevelopment Zones.

An area is qualified to become a zone if it:

(1) is a contiguous area adjacent to or surrounding a river;

(2) comprises a minimum of one half square mile and not more than 12 square miles, exclusive of lakes and waterways;

SB0017 Enrolled - 19 - LRB094 05351 MKM 35395 b (3) satisfies any additional criteria established by the Department consistent with the purposes of this Act;

(4) is entirely within a single home rule municipality;

and (5) has at least 100 acres of environmentally challenged land within 1500 yards of the riverfront.

Section 10-5.

Initiation of River Edge Redevelopment Zones by Municipality.

(a) No area may be designated as a river edge redevelopment zone except pursuant to an initiating ordinance adopted in accordance with this Section.

(b) A municipality may by ordinance designate an area within its jurisdiction as a river edge redevelopment zone, subject to the certification of the Department in accordance with this Act, if:

(i) the area is qualified in accordance with Section 10-4;

and (ii) the municipality has conducted at least one public hearing within the proposed zone area on the question of whether to create the zone, what local plans, tax incentives and other programs should be established in connection with the zone, and what the boundaries of the zone should be;

public notice of such hearing shall be published in at least one newspaper of general circulation within the zone area, not more than 20 days nor less than 5 days before the hearing.

(c) An ordinance designating an area as a river edge redevelopment zone shall set forth:

(i) a precise description of the area comprising the zone, either in the form of a legal description or by reference to roadways, lakes and waterways, and municipality boundaries;

(ii) a finding that the zone area meets the qualifications of Section 10-4;

(iii) provisions for any tax incentives or SB0017 Enrolled - 20 - LRB094 05351 MKM 35395 b reimbursement for taxes, which pursuant to State and federal law apply to business enterprises within the zone at the election of the designating municipality, and which are not applicable throughout the municipality;

(iv) a designation of the area as a river edge redevelopment zone, subject to the approval of the Department in accordance with this Act;

and (v) the duration or term of the river edge redevelopment zone.

(d) This Section does not prohibit a municipality from extending additional tax incentives or reimbursement for business enterprises in river edge redevelopment zones or throughout their territory by separate ordinance.

Section 10-5.1.

Application to Department.

A municipality that has adopted an ordinance designating an area as a river edge redevelopment zone shall make written application to the Department to have the proposed zone certified.

The application shall include:

(1) a certified copy of the ordinance designating the proposed zone;

(2) a map of the proposed zone;

(3) an analysis, and any appropriate supporting documents, demonstrating that the proposed zone area is qualified in accordance with Section 10-4;

(4) a statement detailing any tax, grant, and other financial incentives or benefits, and any programs, to be provided by the municipality to business enterprises or organizations within the zone, other than those provided in the designating ordinance, which are not to be provided throughout the municipality;

(5) a statement setting forth the economic development and planning objectives for the zone;

(6) an estimate of the economic impact of the zone, considering all of the tax incentives, financial benefits and programs contemplated, upon the revenues of the SB0017 Enrolled - 21 - LRB094 05351 MKM 35395 b municipality;

(7) a transcript of all public hearings on the zone;

(8) a statement describing the functions, programs, and services to be performed by designated zone organizations within the zone;

and (9) such additional information as the Department by rule may require.

Section 10-5.2.

Department Review of River Edge Redevelopment Zone Applications.

(a) All applications must be considered and acted upon by the Department no later than 180 days after being received by the Department.

(b) Upon receipt of an application from a municipality the Department shall review the application to determine whether the designated area qualifies as a River Edge Redevelopment Zone under Section 10-4 of this Act.

(c) If any such designated area is found to be qualified to be a River Edge Redevelopment Zone, the Department shall publish a notice in at least one newspaper of general circulation within the municipality in which the proposed zone is located to notify the general public of the application and their opportunity to comment.

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

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

(d) Within 180 days after receiving an application, the Department shall either approve or deny that application.

If an approval of an application is not received within 180 days after the Department’s receipt of the application, then the application is considered to be denied.

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

SB0017 Enrolled - 22 - LRB094 05351 MKM 35395 b (e) In determining which designated areas shall be approved and certified as River Edge Redevelopment Zones, the Department shall give preference to:

(1) areas with high levels of environmentally challenged areas;

(2) areas that have evidenced the widest support from the municipality seeking to have such areas designated as River Edge Redevelopment Zones;

(3) areas for which a specific plan has been submitted to effect economic growth and expansion;

(4) areas for which there is evidence of prior consultation between the municipality seeking designation of an area as an River Edge Redevelopment Zone and business, labor, and neighborhood organizations within the proposed Zone;

(5) areas for which a specific plan has been submitted which will or may be expected to benefit zone residents and workers by increasing their ownership opportunities and participation in a River Edge Redevelopment Zone development.

(f) The Department’s determination of whether to certify a River Edge Redevelopment Zone shall be based on the purposes of this Act, the criteria set forth in Section 10-4 and subsection (e) of this Section, and any additional criteria adopted by regulation of the Department under paragraph (d) of Section 10-4.

Section 10-5.3.

Certification of River Edge Redevelopment Zones.

(a) Approval of designated River Edge Redevelopment Zones shall be made by the Department by certification of the designating ordinance.

The Department shall promptly issue a certificate for each zone upon its approval.

The certificate shall be signed by the Director of the Department, shall make specific reference to the designating ordinance, which shall be attached thereto, and shall be filed in the office of the SB0017 Enrolled - 23 - LRB094 05351 MKM 35395 b Secretary of State.

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

(b) A River Edge Redevelopment Zone shall be effective upon its certification.

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

Upon certification of a River Edge Redevelopment Zone, the terms and provisions of the designating ordinance shall be in effect, and may not be amended or repealed except in accordance with Section 10-5.4.

(c) A River Edge Redevelopment Zone shall be in effect for the period stated in the certificate, which shall in no event exceed 30 calendar years.

Zones shall terminate at midnight of December 31 of the final calendar year of the certified term, except as provided in Section 10-5.4.

(d) In calendar years 2006 and 2007, the Department may certify one pilot River Edge Redevelopment Zone in the City of East St.

Louis and one pilot River Edge Redevelopment Zone in the City of Aurora.

Thereafter the Department may not certify any additional River Edge Redevelopment Zones, but may amend and rescind certifications of existing River Edge Redevelopment Zones in accordance with Section 10-5.4.

(e) A municipality in which a River Edge Redevelopment Zone has been certified must submit to the Department, within 60 days after the certification, a plan for encouraging the participation by minority persons, females, persons with disabilities, and veterans in the zone.

The Department may assist the municipality in developing and implementing the plan.

The terms "minority person", "female", and "person with a disability" have the meanings set forth under Section 2 of the Business Enterprise for Minorities, Females, and Persons with Disabilities Act.

"Veteran" means an Illinois resident who is a veteran as defined in subsection (h) of Section 1491 of Title SB0017 Enrolled - 24 - LRB094 05351 MKM 35395 b 10 of the United States Code.

Section 10-5.4.

Amendment and decertification of River Edge Redevelopment Zones.

(a) The terms of a certified zone designating ordinance may be amended to:

(1) alter the boundaries of the Zone;

(2) expand, limit or repeal tax incentives or benefits provided in the ordinance;

(3) alter the termination date of the zone;

or (4) make technical corrections in the river edge redevelopment zone designating ordinance.

An amendment shall not be effective unless the Department issues an amended certificate for the River Edge Redevelopment Zone, approving the amended designating ordinance.

Upon the adoption of any ordinance amending or repealing the terms of a certified river edge redevelopment zone designating ordinance, the municipality shall promptly file with the Department an application for approval thereof, containing substantially the same information as required for an application under Section 10-5.1 insofar as material to the proposed changes.

The municipality must hold a public hearing on the proposed changes as specified in Section 10-5 and, if the amendment is to effectuate the limitation of tax abatements under Section 10-5.4.1, then the public notice of the hearing shall state that property that is in both the zone and a redevelopment project area may not receive tax abatements unless within 60 days after the adoption of the amendment to the designating ordinance the municipality has determined that eligibility for tax abatements has been established.

(b) The Department shall approve or disapprove a proposed amendment to a certified zone within 90 days after its receipt of the application from the municipality.

The Department may not approve changes in a Zone that are not in conformity with this Act, as now or hereafter amended, or with other applicable laws.

If the Department issues an amended certificate for a SB0017 Enrolled - 25 - LRB094 05351 MKM 35395 b Zone, the amended certificate, together with the amended zone designating ordinance, shall be filed, recorded, and transmitted as provided in Section 10-5.3.

(c) A River Edge Redevelopment Zone may be decertified by joint action of the Department and by the municipality in which the River Edge Development Zone is located.

The designating municipality shall conduct at least one public hearing within the zone prior to its adoption of an ordinance of decertification.

The mayor of the designating municipality shall execute a joint decertification agreement with the Department.

A decertification of a River Edge Redevelopment Zone that was initiated by the joint action of the Department and one or more of the municipalities in which the zone is located shall not become effective until at least 6 months after the execution of the decertification agreement, which shall be filed in the office of the Secretary of State.

(d) A River Edge Redevelopment Zone may be decertified for cause by the Department in accordance with this Section.

Prior to decertification:

(1) the Department shall notify the chief elected official of the designating municipality in writing of the specific deficiencies that provide cause for decertification;

(2) the Department shall place the designating municipality on probationary status for at least 6 months during which time corrective action may be achieved in the zone by the designating municipality;

and (3) the Department shall conduct at least one public hearing within the zone.

If such corrective action is not achieved during the probationary period, the Department shall issue an amended certificate signed by the Director of the Department decertifying the zone, which certificate shall be filed in the office of the Secretary of State.

A certified copy of the amended certificate, or a duplicate original thereof, shall be recorded in the office of recorder of the county in which the SB0017 Enrolled - 26 - LRB094 05351 MKM 35395 b River Edge Redevelopment Zone lies, and shall be provided to the chief elected official of the designating municipality.

Decertification of a River Edge Redevelopment Zone for cause shall not become effective until 60 days after the date of filing.

(e) In the event of a decertification, an amendment reducing the length of the term or the area of a River Edge Redevelopment Zone, or the adoption of an ordinance reducing or eliminating tax benefits in a zone, all benefits previously extended within the zone pursuant to this Act or pursuant to any other Illinois law providing benefits specifically to or within River Edge Redevelopment Zones shall remain in effect for the original stated term of the zone, with respect to business enterprises within the zone on the effective date of such decertification or amendment.

(f) With respect to a business enterprise (or expansion thereof) that is proposed or under development within a zone at the time of a decertification or an amendment reducing the length of the term of the zone, or excluding from the zone area the site of the proposed enterprise, or an ordinance reducing or eliminating tax benefits in a zone, such business enterprise is entitled to the benefits previously applicable within the zone for the original stated term of the zone, if the business enterprise establishes:

(i) that the proposed business enterprise or expansion has been committed to be located within the zone;

(ii) that substantial and binding financial obligations have been made towards the development of such enterprise;

and (iii) that such commitments have been made in reasonable reliance on the benefits and programs which were to have been applicable to the enterprise by reason of the zone, including in the case of a reduction in term of a zone, the original length of the term.

In declaratory judgment actions under this subsection, the Department and the designating municipality shall be necessary SB0017 Enrolled - 27 - LRB094 05351 MKM 35395 b parties defendant.

Section 10-5.4.1.

Adoption of tax increment financing.

(a) If (i) a redevelopment project area is, will be, or has been created by a municipality under Division 74.4 of Article 11 of the Illinois Municipal Code, (ii) the redevelopment project area contains property that is located in a River Edge Redevelopment Zone, (iii) the municipality adopts an amendment to the River Edge Redevelopment Zone designating ordinance pursuant to Section 10-4 of this Act specifically concerning the abatement of taxes on property located within a redevelopment project area created pursuant to Division 74.4 of Article 11 of the Illinois Municipal Code, and (iv) the Department certifies the ordinance amendment, then the property that is located in both the River Edge Redevelopment Zone and the redevelopment project area shall not be eligible for the abatement of taxes under Section 18-170 of the Property Tax Code.

No business enterprise or expansion or individual, however, that has constructed a new improvement or renovated or rehabilitated an existing improvement and has received an abatement on the improvement under Section 18-170 of the Property Tax Code shall be denied any benefit previously extended within the zone pursuant to this Act or pursuant to any other Illinois law providing benefits specifically to or within River Edge Redevelopment Zones.

Moreover, if the business enterprise or individual presents evidence to the municipality within 30 days after the adoption by the municipality of an amendment to the designating ordinance the sufficiency of which shall be determined by findings of the corporate authorities made within 30 days of the receipt of such evidence by the municipality, that before the date of the notice of the public hearing provided by the municipality regarding the amendment to the designating ordinance (i) the business enterprise or expansion or individual was committed to locate within the River Edge Redevelopment Zone, (ii) SB0017 Enrolled - 28 - LRB094 05351 MKM 35395 b substantial and binding financial obligations were made towards the development of the enterprise, and (iii) those commitments were made in reasonable reliance on the benefits and programs that were applicable to the enterprise or individual by reason of River Edge Redevelopment Zone, then the enterprise or expansion or individual shall not be denied any benefit previously extended within the zone pursuant to this Act or pursuant to any other Illinois law providing benefits specifically to or within River Edge Redevelopment Zones.

(b) This Section applies to all property located within both a redevelopment project area adopted under Division 74.4 of Article 11 of the Illinois Municipal Code and a River Edge Redevelopment Zone even if the redevelopment project area was adopted before the effective date of this Act.

(c) After the effective date of this Act, if (i) a redevelopment project area is created by a municipality under Division 74.4 of Article 11 of the Illinois Municipal Code and (ii) the redevelopment project area contains property that is located in a River Edge Redevelopment Zone, the municipality must adopt an amendment to the certified River Edge Redevelopment Zone designating ordinance under Section 10-5.4 specifying that property that is located in both the River Edge Redevelopment Zone and the redevelopment project area shall not be eligible for any abatement of taxes under Section 18-170 of the Property Tax Code for new improvements or the renovation or rehabilitation of existing improvements.

(d) In declaratory judgment actions under this Section, the Department and the designating municipality shall be necessary parties defendant.

Section 10-6.

Powers and duties of Department.

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

(1) To monitor the implementation of this Act and submit reports evaluating the effectiveness of the program and setting forth any suggestions for legislation to the SB0017 Enrolled - 29 - LRB094 05351 MKM 35395 b Governor and General Assembly by October 1 of each year preceding a regular Session of the General Assembly.

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

(b) The Department shall provide information and appropriate assistance to persons desiring to locate and engage in business in a River Edge Redevelopment Zone and to persons engaged in business in a zone.

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

(d) In addition to the reports authorized under subsection (a), no later than December 31, 2009, the Department must submit a report to the General Assembly evaluating the effectiveness of this Act in stimulating economic revitalization in the pilot River Edge Redevelopment Zones authorized by this Act.

Section 10-8.

Zone Administration.

The administration of a River Edge Redevelopment Zone shall be under the jurisdiction of the designating municipality.

Each designating municipality shall, by ordinance, designate a Zone Administrator for the certified zones within its jurisdiction.

A Zone Administrator must be an officer or employee of the municipality.

The Zone Administrator shall be the liaison between the designating municipality, the Department, and any designated zone organizations within zones under his or her jurisdiction.

A designating municipality may designate one or more organizations to be a designated zone organization, as defined under Section 10-3.

The municipality, may, by ordinance, delegate functions within a River Edge Redevelopment Zone to one or more designated zone organizations in such zones.

SB0017 Enrolled - 30 - LRB094 05351 MKM 35395 b Subject to the necessary governmental authorizations, designated zone organizations may, in coordination with the municipality, provide or contract for provision of public services including, but not limited to:

(1) crime-watch patrols within zone neighborhoods;

(2) volunteer day-care centers;

(3) recreational activities for zone-area youth;

(4) garbage collection;

(5) street maintenance and improvements;

(6) bridge maintenance and improvements;

(7) maintenance and improvement of water and sewer lines;

(8) energy conservation projects;

(9) health and clinic services;

(10) drug abuse programs;

(11) senior citizen assistance programs;

(12) park maintenance;

(13) rehabilitation, renovation, and operation and maintenance of low and moderate income housing;

and (14) other types of public services as provided by law or regulation.

Section 10-9.

Notice of cessation of business operations.

Any business located within the River Edge Redevelopment Zone that has received tax credits or exemptions, regulatory relief or any other benefits under this Act shall notify the Department and the municipal officials in which the Zone is located within 60 days after the cessation of any business operations conducted within the Zone.

The Department shall adopt rules to implement and administer this Section.

Section 10-10.

Income tax deduction.

(a) A business entity may receive a deduction against income subject to State taxes for a contribution to a designated zone organization if the project for which the contribution is made has been specifically approved by the SB0017 Enrolled - 31 - LRB094 05351 MKM 35395 b designating municipality and by the Department.

(b) Any designated zone organization seeking to have a project approved for contribution must submit an application to the Department describing the nature and benefit of the project and its potential contributors.

The application must address how the following criteria will be met:

(1) The project must contribute to the self-help efforts of the residents of the area involved.

(2) The project must involve the residents of the area in planning and implementing the project.

(3) The project must lack sufficient resources.

(4) The designated zone organization must be fiscally responsible for the project.

(c) The project must enhance the River Edge Redevelopment Zone in one of the following ways:

(1) by creating permanent jobs;

(2) by physically improving the housing stock;

(3) by stimulating neighborhood business activity;

or (4) by preventing crime.

(d) If the designated zone organization demonstrates its ability to meet the criteria in subsection (b), and the project will enhance the neighborhood in one of the ways listed in subsection (c), the Department shall approve the organization’s proposed project and specify the amount of contributions it is eligible to receive for such project.

Comments from State elected officials and municipal officials of the units of local government in which all or part of the river edge redevelopment zone is located, or in which the project is proposed to be located, shall be solicited by the Department in making such decision.

(e) Within 45 days of the receipt of an application, the Department shall give notice to the applicant as to whether the application has been approved or disapproved.

If the Department disapproves the application, it shall specify the reasons for this decision and allow 60 days for the applicant to amend and resubmit its application.

The Department shall provide SB0017 Enrolled - 32 - LRB094 05351 MKM 35395 b assistance upon request to applicants.

Resubmitted applications shall receive the Department’s approval or disapproval within 30 days of resubmission.

Those resubmitted applications satisfying initial Department objectives shall be approved unless reasonable circumstances warrant disapproval.

(f) On an annual basis, the designated zone organization shall furnish a statement to the Department on the programmatic and financial status of any approved project and an audited financial statement of the project.

(g) For any project which is approved and for which there is a specified amount of contributions which the designated zone organization may receive as provided in subsection (d) of this Section, the designated zone organization shall provide to the Department any information necessary to determine the eligibility of a contribution to the project for a deduction pursuant to subsection (b)(2)(N) of Section 203 of the Illinois Income Tax Act.

The Department shall certify to the Department of Revenue the taxpayers eligible for and the amounts of contributions which those taxpayers may claim as a deduction pursuant to subsection (b)(2)(N) of Section 203 of the Illinois Income Tax Act.

The total of all actual contributions approved by the Department for deductions pursuant to subsection (b)(2)(N) of Section 203 of the Illinois Income Tax Act shall not exceed $15,400,000 in any one calendar year.

ARTICLE 90.

AMENDATORY PROVISIONS Section 90-5.

The Department of Commerce and Economic Opportunity Law of the Civil Administrative Code of Illinois is amended by adding Section 605-907 as follows:

(20 ILCS 605/605-907 new) Sec.

605-907.

River Edge Redevelopment Zone assistance program.

The Department may establish and maintain a program to provide, subject to appropriation, grants and assistance in SB0017 Enrolled - 33 - LRB094 05351 MKM 35395 b connection River Edge Redevelopment Zones that are established under the River Edge Redevelopment Zone Act.

The Department may adopt any rules necessary for the administration of the program under this Section.

Section 90-10.

The Corporate Accountability for Tax Expenditures Act is amended by changing Section 5 as follows:

(20 ILCS 715/5) Sec.

5.

Definitions.

As used in this Act:

"Base years" means the first 2 complete calendar years following the effective date of a recipient receiving development assistance.

"Date of assistance" means the commencement date of the assistance agreement, which date triggers the period during which the recipient is obligated to create or retain jobs and continue operations at the specific project site.

"Default" means that a recipient has not achieved its job creation, job retention, or wage or benefit goals, as applicable, during the prescribed period therefor.

"Department" means, unless otherwise noted, the Department of Commerce and Economic Opportunity Community Affairs or any successor agency.

"Development assistance" means (1) tax credits and tax exemptions (other than given under tax increment financing) given as an incentive to a recipient business organization pursuant to an initial certification or an initial designation made by the Department under the Economic Development for a Growing Economy Tax Credit Act, River Edge Redevelopment Zone Act, and the Illinois Enterprise Zone Act, including the High Impact Business program, (2) grants or loans given to a recipient as an incentive to a business organization pursuant to the River Edge Redevelopment Zone Act, Large Business Development Program, the Business Development Public Infrastructure Program, or the Industrial Training Program, (3) the State Treasurer’s Economic Program Loans, (4) the SB0017 Enrolled - 34 - LRB094 05351 MKM 35395 b Illinois Department of Transportation Economic Development Program, and (5) all successor and subsequent programs and tax credits designed to promote large business relocations and expansions.

"Development assistance" does not include tax increment financing, assistance provided under the Illinois Enterprise Zone Act and River Edge Redevelopment Zone Act pursuant to local ordinance, participation loans, or financial transactions through statutorily authorized financial intermediaries in support of small business loans and investments or given in connection with the development of affordable housing.

"Development assistance agreement" means any agreement executed by the State granting body and the recipient setting forth the terms and conditions of development assistance to be provided to the recipient consistent with the final application for development assistance, including but not limited to the date of assistance, submitted to and approved by the State granting body.

"Full-time, permanent job" means either:

(1) the definition therefor in the legislation authorizing the programs described in the definition of development assistance in the Act or (2) if there is no such definition, then as defined in administrative rules implementing such legislation, provided the administrative rules were in place prior to the effective date of this Act.

On and after the effective date of this Act, if there is no definition of "full-time, permanent job" in either the legislation authorizing a program that constitutes economic development assistance under this Act or in any administrative rule implementing such legislation that was in place prior to the effective date of this Act, then "full-time, permanent job" means a job in which the new employee works for the recipient at a rate of at least 35 hours per week.

"New employee" means either:

(1) the definition therefor in the legislation authorizing the programs described in the definition of development assistance in the Act or (2) if there SB0017 Enrolled - 35 - LRB094 05351 MKM 35395 b is no such definition, then as defined in administrative rules implementing such legislation, provided the administrative rules were in place prior to the effective date of this Act.

On and after the effective date of this Act, if there is no definition of "new employee" in either the legislation authorizing a program that constitutes economic development assistance under this Act nor in any administrative rule implementing such legislation that was in place prior to the effective date of this Act, then "new employee" means a full-time, permanent employee who represents a net increase in the number of the recipient’s employees statewide.

"New employee" includes an employee who previously filled a new employee position with the recipient who was rehired or called back from a layoff that occurs during or following the base years.

The term "New Employee" does not include any of the following:

(1) An employee of the recipient who performs a job that was previously performed by another employee in this State, if that job existed in this State for at least 6 months before hiring the employee.

(2) A child, grandchild, parent, or spouse, other than a spouse who is legally separated from the individual, of any individual who has a direct or indirect ownership interest of at least 5% in the profits, capital, or value of any member of the recipient.

"Part-time job" means either:

(1) the definition therefor in the legislation authorizing the programs described in the definition of development assistance in the Act or (2) if there is no such definition, then as defined in administrative rules implementing such legislation, provided the administrative rules were in place prior to the effective date of this Act.

On and after the effective date of this Act, if there is no definition of "part-time job" in either the legislation authorizing a program that constitutes economic development assistance under this Act or in any administrative rule SB0017 Enrolled - 36 - LRB094 05351 MKM 35395 b implementing such legislation that was in place prior to the effective date of this Act, then "part-time job" means a job in which the new employee works for the recipient at a rate of less than 35 hours per week.

"Recipient" means any business that receives economic development assistance.

A business is any corporation, limited liability company, partnership, joint venture, association, sole proprietorship, or other legally recognized entity.

"Retained employee" means either:

(1) the definition therefor in the legislation authorizing the programs described in the definition of development assistance in the Act or (2) if there is no such definition, then as defined in administrative rules implementing such legislation, provided the administrative rules were in place prior to the effective date of this Act.

On and after the effective date of this Act, if there is no definition of "retained employee" in either the legislation authorizing a program that constitutes economic development assistance under this Act or in any administrative rule implementing such legislation that was in place prior to the effective date of this Act, then "retained employee" means any employee defined as having a full-time or full-time equivalent job preserved at a specific facility or site, the continuance of which is threatened by a specific and demonstrable threat, which shall be specified in the application for development assistance.

"Specific project site" means that distinct operational unit to which any development assistance is applied.

"State granting body" means the Department, any State department or State agency that provides development assistance that has reporting requirements under this Act, and any successor agencies to any of the preceding.

"Temporary job" means either:

(1) the definition therefor in the legislation authorizing the programs described in the definition of development assistance in the Act or (2) if there is no such definition, then as defined in administrative rules implementing such legislation, provided the administrative SB0017 Enrolled - 37 - LRB094 05351 MKM 35395 b rules were in place prior to the effective date of this Act.

On and after the effective date of this Act, if there is no definition of "temporary job" in either the legislation authorizing a program that constitutes economic development assistance under this Act or in any administrative rule implementing such legislation that was in place prior to the effective date of this Act, then "temporary job" means a job in which the new employee is hired for a specific duration of time or season.

"Value of assistance" means the face value of any form of development assistance.

(Source:

P.A.

93-552, eff.

8-20-03;

revised 12-6-03.) Section 90-15.

The Illinois Income Tax Act is amended by changing Sections 201 and 203 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 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 SB0017 Enrolled - 38 - LRB094 05351 MKM 35395 b 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, an amount equal to 3% of the taxpayer’s net income for the taxable year.

(4) (Blank).

(5) (Blank).

(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, an amount equal to 4.8% of the taxpayer’s net income for the taxable year.

(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 SB0017 Enrolled - 39 - LRB094 05351 MKM 35395 b 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.

(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 SB0017 Enrolled - 40 - LRB094 05351 MKM 35395 b shall the sum of the rates of tax imposed by subsections (b) and (d) be reduced below the rate at which the sum of:

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

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

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

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

(e) Investment credit.

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

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

There shall be allowed an additional credit equal to .5% of the basis of qualified property placed in service during the taxable year, provided such property is placed in service on or after SB0017 Enrolled - 41 - LRB094 05351 MKM 35395 b 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 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 SB0017 Enrolled - 42 - LRB094 05351 MKM 35395 b (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 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 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 SB0017 Enrolled - 43 - LRB094 05351 MKM 35395 b 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 or services rendered in conjunction with the sale of tangible consumer goods or commodities.

(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 SB0017 Enrolled - 44 - LRB094 05351 MKM 35395 b 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 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, 2008, except for costs incurred pursuant to a binding contract entered into on or before December 31, 2008.

(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 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 SB0017 Enrolled - 45 - LRB094 05351 MKM 35395 b the taxable year by the partnership or Subchapter S corporation, determined in accordance with the determination of income and distributive share of income under Sections 702 and 704 and Subchapter S of the Internal Revenue Code.

This paragraph is exempt from the provisions of Section 250.

  (f) Investment credit;

Enterprise Zone;

River Edge Redevelopment Zone.

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

For partners, shareholders of Subchapter S corporations, and owners of limited liability companies, if the liability company is treated as a partnership for purposes of federal and State income taxation, there shall be allowed a credit under this subsection (f) to be determined in accordance with the determination of income and distributive share of income under Sections 702 and 704 and Subchapter S of the Internal Revenue Code.

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

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

For tax years ending on or after December 31, 1985, the credit shall be allowed for the tax year in which the property is placed in service, or, if the amount of the credit exceeds the tax liability for that year, whether it exceeds the original liability or the liability as later amended, such excess may be carried forward and applied to the tax liability of the 5 taxable years SB0017 Enrolled - 46 - LRB094 05351 MKM 35395 b following the excess credit year.

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

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

(2) The term qualified property means property which:

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

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

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

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

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

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

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

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

(6) If during any taxable year, any property ceases to be qualified property in the hands of the taxpayer within 48 months after being placed in service, or the situs of any qualified property is moved outside the Enterprise Zone SB0017 Enrolled - 47 - LRB094 05351 MKM 35395 b or River Edge Redevelopment Zone within 48 months after being placed in service, the tax imposed under subsections (a) and (b) of this Section for such taxable year shall be increased.

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

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

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

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

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

  (g) Jobs Tax Credit;

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

(1) A taxpayer conducting a trade or business in an enterprise zone or a High Impact Business designated by the Department of Commerce and Economic Opportunity or for taxable years ending on or after December 31, 2006, in a SB0017 Enrolled - 48 - LRB094 05351 MKM 35395 b River Edge Redevelopment Zone conducting a trade or business in a federally designated Foreign Trade Zone or Sub-Zone shall be allowed a credit against the tax imposed by subsections (a) and (b) of this Section in the amount of $500 per eligible employee hired to work in the zone during the taxable year.

(2) To qualify for the credit:

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

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

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

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

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

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

(C) Employed in the enterprise zone, River Edge SB0017 Enrolled - 49 - LRB094 05351 MKM 35395 b Redevelopment Zone, or Foreign Trade Zone or Sub-Zone.

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

(D) A full-time employee working 30 or more hours per week.

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

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

If the amount of the credit exceeds the tax liability for that year, whether it exceeds the original liability or the liability as later amended, such excess may be carried forward and applied to the tax liability of the 5 taxable years following the excess credit year.

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

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

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

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

(h) Investment credit;

High Impact Business.

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

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

The credit shall not be available (i) until the SB0017 Enrolled - 50 - LRB094 05351 MKM 35395 b minimum investments in qualified property set forth in subdivision (a)(3)(A) of Section 5.5 of the Illinois Enterprise Zone Act have been satisfied or (ii) until the time authorized in subsection (b-5) of the Illinois Enterprise Zone Act for entities designated as High Impact Businesses under subdivisions (a)(3)(B), (a)(3)(C), and (a)(3)(D) of Section 5.5 of the Illinois Enterprise Zone Act, and shall not be allowed to the extent that it would reduce a taxpayer’s liability for the tax imposed by subsections (a) and (b) of this Section to below zero.

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

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

For tax years ending on or after December 31, 1987, the credit shall be allowed for the tax year in which the property is placed in service, or, if the amount of the credit exceeds the tax liability for that year, whether it exceeds the original liability or the liability as later amended, such excess may be carried forward and applied to the tax liability of the 5 taxable years following the excess credit year.

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

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

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

(2) The term qualified property means property which:

(A) is tangible, whether new or used, including SB0017 Enrolled - 51 - LRB094 05351 MKM 35395 b buildings and structural components of buildings;

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

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

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

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

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

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

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

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

For the purposes of this paragraph (6), a reduction of the SB0017 Enrolled - 52 - LRB094 05351 MKM 35395 b basis of qualified property resulting from a redetermination of the purchase price shall be deemed a disposition of qualified property to the extent of such reduction.

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

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

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

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

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

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

If there is a credit under this subsection from more than one tax year that is available to offset a liability the SB0017 Enrolled - 53 - LRB094 05351 MKM 35395 b earliest credit arising under this subsection shall be applied first.

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

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

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

(j) Training expense credit.

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

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

For partners, shareholders of subchapter S corporations, and owners of limited liability companies, if the liability company is treated as a partnership for purposes of federal and State income taxation, there shall be allowed a credit under this subsection (j) to be determined in accordance with the determination of income and distributive share of income under Sections 702 and 704 and subchapter S of the Internal Revenue Code.

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

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

If SB0017 Enrolled - 54 - LRB094 05351 MKM 35395 b there is a credit under this subsection from more than one tax year that is available to offset a liability the earliest credit arising under this subsection shall be applied first.

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

(k) Research and development credit.

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

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

For partners, shareholders of subchapter S corporations, and owners of limited liability companies, if the liability company is treated as a partnership for purposes of federal and State income taxation, there shall be allowed a credit under this subsection to be determined in accordance with the determination of income and distributive share of income under Sections 702 and 704 and subchapter S of the Internal Revenue Code.

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

Any credit in excess of the tax liability for the taxable SB0017 Enrolled - 55 - LRB094 05351 MKM 35395 b year may be carried forward.

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

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

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

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

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

No inference shall be drawn from this amendatory Act of the 91st General Assembly in construing this Section for taxable years beginning before January 1, 1999.

(l) Environmental Remediation Tax Credit.

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

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

The credit must be claimed SB0017 Enrolled - 56 - LRB094 05351 MKM 35395 b for the taxable year in which Agency approval of the eligible remediation costs is granted.

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

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

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

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

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

For partners and shareholders of subchapter S corporations, there shall be allowed a credit under this subsection to be determined in accordance with the determination of income and distributive share of income under Sections 702 and 704 and subchapter S of the Internal Revenue Code.

(ii) A credit allowed under this subsection that is unused in the year the credit is earned may be carried SB0017 Enrolled - 57 - LRB094 05351 MKM 35395 b forward to each of the 5 taxable years following the year for which the credit is first earned until it is used.

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

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

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

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

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

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

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

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

(m) Education expense credit.

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

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

In no event shall a credit under this subsection reduce the taxpayer’s liability SB0017 Enrolled - 58 - LRB094 05351 MKM 35395 b under this Act to less than zero.

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

For purposes of this subsection:

"Qualifying pupils" means individuals who (i) are residents of the State of Illinois, (ii) are under the age of 21 at the close of the school year for which a credit is sought, and (iii) during the school year for which a credit is sought were full-time pupils enrolled in a kindergarten through twelfth grade education program at any school, as defined in this subsection.

"Qualified education expense" means the amount incurred on behalf of a qualifying pupil in excess of $250 for tuition, book fees, and lab fees at the school in which the pupil is enrolled during the regular school year.

"School" means any public or nonpublic elementary or secondary school in Illinois that is in compliance with Title VI of the Civil Rights Act of 1964 and attendance at which satisfies the requirements of Section 26-1 of the School Code, except that nothing shall be construed to require a child to attend any particular public or nonpublic school to qualify for the credit under this Section.