Section 580.10  Purpose

 

It is the intent of the General Assembly that Illinois should lead the nation in the production of electric vehicles and other products essential to the growth of the renewable energy sector. The General Assembly finds that, through investments in electric vehicle and clean energy manufacturing, Illinois will be on the forefront of emerging technologies that are currently transforming those industries. [20 ILCS 686/5]

 

Section 580.20  Definitions

 

The following definitions are applicable to this Part.

 

"Act" means the Reimagining Energy and Vehicles in Illinois Act. [20 ILCS 686]

 

“Advanced battery” means a battery that consists of a battery cell that can be integrated into a module, pack or system to be used in energy storage applications, including a battery used in an electric vehicle or the electric grid. 

 

“Advanced battery component” means a component of an advanced battery, including materials, enhancements, enclosures, anodes, cathodes, electrolytes, cells, and other associated technologies that comprise an advanced battery.  

 

"Agreement" means the agreement between a taxpayer and the Department under the provisions of Section 45 of this Act.

 

"Applicant" means a taxpayer that:

 

operates a business in Illinois or is planning to locate a business within the State of Illinois and

 

is engaged in interstate or intrastate commerce as an electric vehicle manufacturer, an electric vehicle component parts manufacturer, an electric vehicle power supply equipment manufacturer, or a renewable energy manufacturer.

 

"Applicant" does not include a taxpayer who closes or substantially reduces by more than 50% operations at one location in the State and relocates substantially the same operation to another location in the State. This does not prohibit a Taxpayer from expanding its operations at another location in the State. This also does not prohibit a Taxpayer from moving its operations from one location in the State to another location in the State for the purpose of expanding the operation, provided that the Department determines that expansion cannot reasonably be accommodated within the municipality or county in which the business is located, or, in the case of a business located in an incorporated area of the county, within the county in which the business is located, after conferring with the chief elected official of the municipality or county and taking into consideration any evidence offered by the municipality or county regarding the ability to accommodate expansion within municipality or county.

 

"Battery raw materials" means the raw and processed form of a mineral, metal, chemical, or other material used in an advanced battery component.

 

"Battery raw materials refining service provider" means a business that operates a facility that filters, sifts, and treats battery raw materials for use in an advanced battery.

 

"Battery recycling and reuse manufacturer" means a manufacturer that is primarily engaged in the recovery, retrieval, processing, recycling, or recirculating of battery raw materials for new use in electric vehicle batteries.

 

"Capital improvements" means the purchase, renovation, rehabilitation, or construction of permanent tangible land, buildings, structures, equipment, and furnishings in an approved project sited in Illinois and expenditures for goods or services that are normally capitalized, including organizational costs and research and development costs incurred in Illinois. For land, buildings, structures, and equipment that are leased, the lease must equal or exceed the term of the agreement, and the cost of the property shall be determined from the present value, using the corporate interest rate prevailing at the time of the application, of the lease payments.

 

"Compensation" means compensation as defined in Section 1501(a)(3) of the Income Tax Act. [35 ILCS 5/1501(a)(3)]

 

"Credit" means either a "REV Illinois Credit" or a "REV Construction Jobs Credit" agreed to between the Department and applicant under this Act.

 

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

 

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

 

"Electric vehicle" means a vehicle that is exclusively powered by and refueled by electricity, including electricity generated through a hydrogen fuel cells or solar technology.  "Electric vehicle" does not include hybrid electric vehicles, electric bicycles, or extended-range electric vehicles that are also equipped with conventional fueled propulsion or auxiliary engines.

 

"Electric vehicle manufacturer" means a new or existing manufacturer that is primarily focused on reequipping, expanding, or establishing a manufacturing facility in Illinois that produces electric vehicles as defined in this Section.

 

"Electric vehicle component parts manufacturer" means a new or existing manufacturer that is focused on reequipping, expanding, or establishing a manufacturing facility in Illinois that produces parts or accessories used in electric vehicles, as defined in this Section, including advanced battery component parts.

 

"Electric vehicle power supply equipment" means the equipment used specifically for the purpose of delivering electricity to an electric vehicle including hydrogen fuel cells or solar refueling infrastructure.

 

"Electric vehicle power supply manufacturer" means a new or existing manufacturer that is focused on reequipping, expanding, or establishing a manufacturing facility in Illinois that produces electric vehicle power supply equipment used for the purpose of delivering electricity to an electric vehicle, including hydrogen fuel cells or solar refueling infrastructure.

 

"Energy Transition Area" means a county with less than 100,000 people or a municipality that contains one or more of the following:

 

a fossil fuel plant that was retired from service or has significant reduced service within 6 years before the time of the application or will be retired or have service significantly reduced within 6 years following the time of the application; or

 

a coal mine that was closed or had operations significantly reduced within 6 years before the time of the application or is anticipated to be closed or have operations significantly reduced within 6 years following the time of the application.

 

"Full-time employee" means an individual who is employed for consideration for at least 35 hours each week or who renders any other standard of service generally accepted by industry custom or practice as full-time employment. Annually scheduled periods for inventory or repairs, vacations, holidays and paid time for sick leave, vacation or other leave shall be included in this computation of full-time employment. An individual for whom a W-2 is issued by a Professional Employer Organization (PEO) is a full-time employee if employed in the service of the applicant for consideration for at least 35 hours each week.

 

"Incremental income tax" means the total amount withheld during the taxable year from the compensation of new employees and, if applicable, retained employees under Article 7 of the Illinois Income Tax Act arising from employment at a project that is the subject of an agreement.

 

"Institution of higher education" or "institution" means any accredited public or private university, college, community college, business, technical, or vocational school, or other accredited educational institution offering degrees and instruction beyond the secondary school level.

 

"Local workforce investment area" means a single county or multiple counties designated by the Governor, which allows for the receipt of an allotment of funds under Sections 127(b) or 132(b) of the Workforce Innovation and Opportunity Act, (PL 113 through 128 (2014)) (WIOA), with considerations consisting of the extent to which the areas:

 

are consistent with labor market areas in the State;

 

are consistent with regional economic development areas in the State; and

 

have available the federal and non-federal resources necessary to effectively administer activities under subtitle B and other applicable provisions of WIOA,

 

including whether the areas have the appropriate education and training providers, such as institutions of higher education and area career and technical education schools.

 

"Minority person" means a minority person as defined in the Business Enterprise for Minorities, Women, and Persons with Disabilities Act [30 ILCS 575].

 

"New employee" means a newly-hired full-time employee employed to work at the project site and whose work is directly related to the project.

 

The term "New Employee" does not include:

 

an employee of the taxpayer who performs a job that was previously performed by another employee, if that job existed for at least 6 months before hiring the employee;

 

an employee of the taxpayer who was previously employed in Illinois by a related member of the taxpayer and whose employment was shifted to the taxpayer after the taxpayer entered into the tax credit agreement;

 

any individual who has a direct or an indirect ownership interest of at least 5% in the profits, equity, capital, or value of the taxpayer or 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 an indirect ownership interest of at least 5% in the profits, equity, capital, or value of the taxpayer.

 

"Noncompliance date" means, in the case of a taxpayer that is not complying with the requirements of the agreement or the provisions of this Act, the day following the last date upon which the taxpayer was in compliance with the requirements of the agreement and the provisions of this Act, as determined by the Director, pursuant to Section 70.

 

"Pass-through entity" means an entity that is exempt from the tax under subsection (b) or (c) of Section 205 of the Illinois Income Tax Act [35 ILCS 5].

 

"Placed in service" means the state or condition of readiness, availability for a specifically assigned function, and the facility is constructed and ready to conduct its facility operations to manufacture goods.

 

"Professional employer organization" or "PEO" means an employee leasing company that is an individual or entity contracting with a client to supply or assume responsibility for personnel management of one or more workers to perform services for the client on an on-going basis rather than under a temporary help arrangement, as defined in Section 206.1 of the Illinois Unemployment Insurance Act [820 ILCS 405].

 

"Program" means the Reimagining Energy and Vehicles in Illinois Program (the REV Illinois Program) established in this Act.

 

"Project" or "REV Illinois Project" means a for-profit economic development activity for the manufacture of electric vehicles, electric vehicle component parts, electric vehicle power supply equipment or renewable energy products which is designated by the Department as a REV Illinois Project and is the subject of an agreement.

 

"Project costs" includes cost of the project incurred or to be incurred by the taxpayer including:  capital investment, including, but not limited to, equipment, buildings, or land; infrastructure development; debt service, except refinancing of current debt; research and development; job training and education; lease costs or relocation costs, but excludes the value of State incentives, including discretionary tax credits, discretionary job training grants, or the interest savings of below market rate loans.

 

"Recycling facility" means a location at which the taxpayer disposes of batteries and other component parts in manufacturing of electric vehicles, electric vehicle component parts, or electric vehicle power supply equipment.

 

"Related member" means a person that, with respect to the taxpayer during any portion of the taxable year, is any one of the following:

 

an individual stockholder, if the stockholder and the members of the stockholder's family (as defined in Section 318 of the Internal Revenue Code) own directly, indirectly, beneficially, or constructively, in the aggregate, at least 50% of the value of the taxpayer's outstanding stock.

 

a partnership, estate, trust and any partner or beneficiary, if the partnership, estate, or trust, and its partners or beneficiaries own directly, indirectly, beneficially, or constructively, in the aggregate, at least 50% of the profits, capital, stock, or value of the taxpayer.

 

a corporation, and any party related to the corporation in a manner that would require an attribution of stock from the corporation under the attribution rules of Section 318 of the Internal Revenue Code, if the Taxpayer owns directly, indirectly, beneficially, or constructively at least 50% of the value of the corporation's outstanding stock.

 

a corporation and any party related to that corporation in a manner that would require an attribution of stock from the corporation to the party or from the party to the corporation under the attribution rules of Section 318 of the Internal Revenue Code, if the corporation and all such related parties own in the aggregate at least 50% of the profits, capital, stock, or value of the taxpayer.

 

a person to or from whom there is an attribution of stock ownership in accordance with Section 1563(e) of the Internal Revenue Code, except, for purposes of determining whether a person is a related member under this paragraph, 20% shall be substituted for 5% wherever 5% appears in Section 1563(e) of the Internal Revenue Code.

 

"Renewable energy" means energy produced using the materials and sources of energy through which renewable energy resources are generated.

 

"Renewable energy manufacturer" means a manufacturer whose primary function is to manufacture or assemble: 

 

equipment, systems, or products used to produce renewable or nuclear energy;

 

products used for energy conservation, storage, or grid efficiency purposes; or

 

component parts for that equipment or those systems or products.

 

"Renewable energy resources" has the meaning ascribed to that term in Section 1-10 of the Illinois Power Agency Act.

 

"Retained employee" means a full-time employee employed by the taxpayer prior to the term of the Agreement who continues to be employed during the term of the agreement whose job duties are directly related to the project. The term "retained employee" does not include any individual who has a direct or an indirect ownership interest of at least 5% in the profits, equity, capital, or value of the taxpayer or 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 of at least 5% in the profits, equity, capital, or value of the taxpayer.

 

"REV Illinois credit" means a credit agreed to between the Department and the applicant under this Act that is based on the incremental income tax attributable to new employees and, if applicable, retained employees, and on training costs for such employees at the applicant's project.

 

"REV construction jobs credit" means a credit agreed to between the Department and the applicant under this Act that is based on the incremental income tax attributable to construction wages paid in connection with construction of the project facilities.

 

"Statewide baseline" means the total number of full-time employees of the applicant and any related member employed by such entities at the time of application for incentives under this Act.

 

"Taxpayer" means an individual, corporation, partnership, or other entity that has a legal obligation to pay Illinois income taxes and file an Illinois income tax return.

 

"Training costs" means costs incurred to upgrade the technological skills of full-time employees in Illinois and includes: curriculum development; training materials (including scrap product costs); trainee domestic travel expenses; instructor costs (including wages, fringe benefits, tuition and domestic travel expenses); rent, purchase or lease of training equipment; and other usual and customary training costs. "Training costs" do not include costs associated with travel outside the United States (unless the taxpayer receives prior written approval for the travel by the Director based on a showing of substantial need or other proof the training is not reasonably available within the United States), wages and fringe benefits of employees during periods of training, administrative cost related to full-time employees of the taxpayer, or costs which an applicant received a tax credit or payment for the same training costs for the subject employees under another State program. (Section 10 of the Act)

 

"Underserved area" means any geographic areas as defined in Section 55 of the Economic Development for a Growing Economy Tax Credit Act.

SUBPART B: TAX CREDITS

 

Section 580.30  Eligibility Determination

 

a)         Any taxpayer that (i) operates a business in Illinois or is planning to locate a business within the State of Illinois and (ii) is engaged in interstate or intrastate commerce for the purpose of manufacturing electric vehicles, electric vehicle component parts, battery recycling and reuse manufacturers or battery raw materials service providers, electric vehicle power supply equipment, or renewable energy manufacturers is an eligible business. [20 ILCS 686/10]

 

b)         In order to qualify for credits under the REV Illinois Program, an Applicant must:

 

1)         for an electric vehicle manufacturer:

 

A)        make an investment of at least $1,500,000,000 in capital improvements at the project site;

 

B)        to be placed in service within the State within a 60-month period after approval of the application; and

 

C)        create at least 500 new full-time employee jobs; or

 

2)         for an electric vehicle component parts manufacturer or a renewable energy manufacturer:

 

A)        make an investment of at least $300,000,000 in capital improvements at the project site;

 

B)        manufacture one or more parts that are primarily used for electric vehicle manufacturing or renewable energy manufacturing.

 

C)        to be placed in service within the State within a 60-month period after approval of the application; and

 

D)        create at least 150 new full-time employee jobs; or

 

3)         for an electric vehicle manufacturer, an electric vehicle power supply equipment manufacturer, an electric vehicle component parts manufacturer, or a renewable energy manufacturer that does not qualify under subsection (b)(2), a battery recycling and reuse manufacturer, or a battery raw materials refining service provider:

 

A)        make an investment of at least $2,500,000 in capital improvements at the project site;

 

B)        for electric vehicle component part manufacturers, manufacture one or more parts that are primarily used for electric vehicle manufacturing or renewable energy manufacturing;

 

C)        to be placed in service within the State within a 48-month period after approval of the application; and

 

D)        create at least 50 new full-time employee jobs or equivalent to 10% of global employment of the taxpayer; or

 

4)         for an electric vehicle manufacturer, an electric vehicle component parts manufacturer, or a renewable energy manufacturer with existing operations within Illinois that intends to convert or expand, in whole or in part, from traditional manufacturing to electric vehicle manufacturing, electric vehicle component parts manufacturing, renewable energy manufacturing, or electric vehicle power supply equipment manufacturing:

 

A)        make an investment of at least $100,000,000 in capital improvements at the project site;

 

B)        to be placed in service within the State within a 60-month period after approval of the application; and

 

C)        create the lesser of 50 new full-time employee jobs or new full-time employee jobs equivalent to 10% of the statewide baseline applicable to the taxpayer and any related member at the time of application.

 

c)         For any applicant creating the full-time employee jobs noted in subsection (b), applicants shall receive credit for those jobs with compensation equal to or greater than 120% of the average wage paid to full-time employees in a similar position within an occupational group in the county where the project is located, and the Department shall utilize the occupational group data provided by the U.S. Bureau of Labor Statistics, the Illinois Department of Employment Security or other reliable data source.

 

d)         For any applicant, within 24 months after being placed in service, it must certify to the Department that it is carbon neutral or has attained certification under one of more of the following green building standards:

 

1)         BREEAM for New Construction or BREEAM In-Use;

 

2)         ENERGY STAR;

 

3)         Envision;

 

4)         ISO 50001 – energy management;

 

5)         LEED for Building Design and Construction or LEED for Building Operations and Maintenance;

 

6)         Green Globes for New Construction or Green Globes for Existing Buildings; or

 

7)         UL 3223. REV Illinois Program; Project Applications. [20 ILCS 686/20]

 

Section 580.40  Form of Application

 

a)         Applications will be accepted at any time during the year.  An application should be submitted on the standard application form provided by the Department and posted to the Department's website (https://dceo.illinois.gov/businesshelp/rev.html).  Submittal of an application does not commit the Department to award assistance or to pay any costs incurred by the applicant in the preparation of an application.

 

b)         Any taxpayer planning a project to be located in Illinois may request consideration for the designation of its project as a REV Illinois project, by application to the Department, in which the Applicant states its intent to make at least a specified level of investment and intends to hire a specified number of full-time employees at a designated location in Illinois as set forth in Section 20 of the Act. [20 ILCS 686/20(b)]

 

c)         Written applications will be required and must be submitted on the standard application form provided by the Department.  Applications shall be submitted to the designated Department email address (CEO.REV@Illinois.gov) and also identified on the application form.  There is no application fee and the application shall include:

 

1)         Application Cover Page – containing name, address, and telephone number of Applicant; key contact and title; total number of new employees to be hired, and when applicable, the number of Full-time Employees to be retained; company Federal Employer Identification Number (F.E.I.N.); Standard Industrial Code (S.I.C.); if available, Illinois Unemployment Insurance Account Code; State Senate District number; State Representative District number; authorized signatures; and related information.

 

2)         Project Summary – a detailed description of the project that is to be the subject of the agreement. [20 ILCS 686/45(a)(1)]

 

3)         Site Map – an outline of the general location of the project on a site map, including the location of any flood plain areas and wetland areas.

 

4)         Jobs Impact – a detailed description of the number of new employees to be hired, and the occupation and payroll of the full-time jobs to be created or retained as a result of the project, and a schedule of anticipated starting dates of the new hires.  In addition, the applicant must provide the total number of full-time employees employed by the applicant and any related member, subsidiary, parent, or sister company in the State of Illinois at the time of the application. If the applicant seeks a credit with respect to retained employees, the application shall include the occupation and payroll of the full-time employees to be retained because of the project. [20 ILCS 686/45(a)(9)]

 

5)         Capital Improvements Planned – a detailed description of the minimum investment the taxpayer will make in capital improvements, the time period for placing the property in service, and the designated location in Illinois for the investment.  This shall include but not be limited to a description (or specifications or lists) of the planned capital improvements demonstrating the investment is qualified; documentation to substantiate the value of the investment (value of capital improvements as provided by appraisers, vendors, contractors and/or architects and engineers); and a schedule regarding when the eligible investment will be placed in service. [20 ILCS 686/45(a)(10)]

 

6)         Total Project Costs – a detailed description of the total project cost.

 

7)         Statewide Baseline – a detailed description of full-time employees of the applicant and any related members employed by such entities at the time of the application.  The information provided for the current full-time employees shall include the following:  name, position title, occupation code, date of hire, and facility address.

 

8)         Hiring plan – a detailed description of applicant's hiring plan and commitment to recruit and hire full-time employee positions at the project site. The hiring plan may include a partnership with an institution of higher education to provide internships, including, but not limited to, internships supported by the Clean Jobs Workforce Network Program, or full-time permanent employment for students at the project site. Additionally, the applicant may create or utilize participants from apprenticeship programs that are approved by and registered with the United States Department of Labor's Bureau of Apprenticeship and Training. The Applicant may apply for apprenticeship education expense credits in accordance with the provisions set forth in 14 Ill. Adm. Code 522.  For existing facilities of applicants under Section 580.30(b)(4), if the taxpayer expects a reduction in force due to its transition to manufacturing electric vehicles, electric vehicle component parts, or electric vehicle power supply equipment, the plan submitted under this Section must outline the taxpayer's plan to assist with retraining its workforce aligned with the taxpayer's adoption of new technologies and anticipated efforts to retrain employees through employment opportunities with the taxpayer's workforce.  [20 ILCS 686/20]

 

9)         Recycling Capabilities – Each applicant must demonstrate a contractual or other relationship with a recycling facility, or demonstrate its own recycling capabilities, at the time of application. [20 ILCS 686/20(g)]

 

10)         Financial Statement – a balance sheet and a profit and loss statement of the taxpayer for the last two years.

 

11)         Other Provisions – any other provisions or information the Department determines is necessary to evaluate the applicant's eligibility under the Act and if the criteria established in Section 580.30 are met.

 

d)         An applicant that is subject to an existing agreement under the Economic Development for a Growing Economy Tax Credit Act may apply to the Department to amend the agreement to allow the project in that agreement to become a designated REV Illinois project by submitting an application form.  If approved, the time accrued during which the project was eligible for credits under the existing agreement under the Economic Development for a Growing Economy Tax Credit Act shall count toward the duration of the credit subject to the limitations described in Section 40 of the Act.  [20 ILCS 686/30(h)]

 

e)         The applicant is responsible for the accuracy of all data, information and documentation included in its application.  Once submitted, applications shall become the property of the Department.

 

Section 580.50  Application Review

 

a)         Prior to substantive evaluation of an application, the Department shall screen all applications to determine that all requirements of the application package, as described in Section 580.40, have been addressed.  Applicants will be notified of deficiencies in applications and given an opportunity to correct those deficiencies through submission of additional documentation.

 

b)         In evaluating applications, the Department shall evaluate and confirm if all of the criteria in subsections (b)(1) through (4) are met.  If the applicant demonstrates that all criteria are met, the Department will notify the applicant by electronic mail that the application was accepted. If the applicant cannot demonstrate that all four conditions exist, the application should be denied and notification to the applicant provided in accordance with Section 580.60.

 

1)         the applicant intends to make the required investment in the State and intends to hire the required number of full-time employees;

 

2)         the applicant's project is economically sound and will benefit the people of the State by increasing opportunities for employment and strengthen the economy of the State;

 

3)         awarding the credit will result in an overall positive fiscal impact to the State, as certified by the Department using the best available data; and

 

4)         the credit is not prohibited under this Act. [20 ILCS 686/25]

 

c)         A taxpayer may not enter into more than one agreement under this Act with respect to a single address or location for the same period of time. Also, a taxpayer may not enter into an agreement under this Act with respect to a single address or location for the same period of time for which the taxpayer currently holds an active agreement under the Economic Development for a Growing Economy Tax Credit Act. This provision does not preclude the applicant from entering into an additional agreement after the expiration or voluntary termination of an earlier agreement under this Act or under the Economic Development for a Growing Economy Tax Credit Act to the extent the taxpayer's application otherwise satisfies the terms and conditions of the Act and is approved by the Department. (20 ILCS 686/20(h))

 

Section 580.60  Application Denial/Approval

 

a)         Applicants shall be notified in writing as to the Department's evaluation of all completed applications.  If the Department denies an application for the Credit, it will specify the reasons for the denial in writing and allow the applicant 30 days to amend and resubmit its application for evaluation.  If the applicant disagrees with the Department's decision it may seek relief through the process afforded in the Department's Administrative Hearing Rules set forth at 56 Ill. Adm. Code 2605.

 

b)         For applications accepted by the Department, the Department will send a notification by e-mail to the applicant.  The Department will proceed to negotiate a formal agreement with the applicants determined to be eligible for award of a credit.

 

Section 580.70  Tax Credit Award

 

For tax years beginning on or after January 1, 2025, a taxpayer who has entered an agreement under the Reimagining Energy and Vehicles in Illinois Act is entitled to a credit against the taxes imposed under subsections (a) and (b) of Section 201 of the Illinois Income Tax Act in an amount to be determined in the agreement.  [35 ILCS 5/236]

 

a)         REV Illinois Credit

 

1)         A taxpayer may receive a tax credit against the tax imposed under subsections (a) and (b) of Section 201 of the Illinois Income Tax Act, not to exceed the sum of:

 

A)        75% of the incremental income tax attributable to new or retained employees at the applicant's project; and

 

B)        10% of training costs of the new employees.

 

2)         If the project is in an underserved area or an energy transition area, then the amount of the credit may not exceed the sum of:

 

A)        100% of the incremental income tax attributable to new or retained employees at the applicant's project; and

 

B)        10% of the training costs of the new employees.

 

3)         The percentage of training costs includable in the calculation may be increased by an additional 15% for training costs associated with new employees that are recent (2 years or less) graduates, certificate holders, or credential recipients from any of the following:

 

A)        an institution of higher education in Illinois;

 

B)        Clean Jobs Workforce Network Program; or

 

C)        apprenticeship and training program located in Illinois and approved by and registered with the United States Department of Labor's Bureau of Apprenticeship and Training.

 

4)         The percentage of training costs includable in the calculation shall not exceed a total of 25%.

 

5)         If an applicant agrees to hire the required number of new employees, then the maximum amount of the credit for that applicant may be increased by an amount not to exceed 75% of the incremental income tax attributable to retained employees at the applicant's project; provided that, in order to receive the increase for retained employees, the applicant must, if applicable, meet or exceed the statewide baseline that is specified in the agreement.  If the project is an underserved area or an energy transition area, the maximum amount of the credit attributable to retained employees for the applicant may be increased to an amount not to exceed 100% of the incremental income tax attributable to retained employees at the applicant's project; provided that, in order to receive the increase for retained employees, the applicant must meet or exceed the statewide baseline that is specified in the agreement.

 

6)         REV Illinois Credits awarded may include credit earned for incremental income tax withheld and training costs. (Section 30(b) of the Act)

 

b)         REV Construction Jobs Credit

 

1)         For construction wages associated with a project that qualified for a REV Illinois Credit referenced in subsection 570.80(a), the Taxpayer may receive a tax credit against the tax imposed under subsections (a) and (b) of Section 201 of the Illinois Income Tax Act in an amount equal to 50% of the incremental income tax attributable to construction wages paid in connection with construction of the project facilities, as a jobs credit for workers hired to construct the project.

 

2)         The REV construction jobs credit may not exceed 75% of the amount of the incremental income tax attributable to construction wages paid in connection with construction of the project facilities if the project is in an underserved area or an energy transition area. [20 ILCS 686/30(c]

 

3)         The applicant seeking certification for a REV construction jobs credit shall require the contractor to enter into a project labor agreement that conforms with the Project Labor Agreements Act. [20 ILCS 686/30(e)]

 

c)         Tax Credit Certification to the Department of Revenue. The Department shall certify to the Department of Revenue the following information regarding the tax credit award for each taxpayer outlined in subsections 580.70(a) and (b):

 

1)         The identity of taxpayers that are eligible for the REV Illinois credit and REV construction jobs credit;

 

2)         The amount of the REV Illinois credit and REV construction jobs credit awarded in each calendar year; and

 

3)         The amount of the REV Illinois credit and REV construction jobs credit claimed in each calendar year. (20 ILCS 686/30(d))

 

Section 580.80  Determination of Amount and Term of the Credit

 

a)         The Department shall determine the amount and duration of the REV Illinois credit awarded under the Act.

 

b)         The credit may be stated as a percentage of the incremental income tax and training costs attributable to the applicant's project and may include a fixed dollar limitation.

 

c)         For the credit term, a project that qualified under paragraph (1), (2), or (4) of subsection (c) of Section 20 of the Act, the duration of the credit may not exceed 15 taxable years, unless the agreement is renewed.

 

d)         For project that qualified under paragraph (3) of subsection (c) of Section 20 of the Act, the duration of the credit may not exceed 10 taxable years, unless the agreement is renewed. (Section 40 of the Act)

 

Section 580.90  Tax Credit Agreement

 

The Department and each taxpayer whom the Department determines qualifies for a credit under the Act shall enter into an Agreement that specifies terms and conditions regarding the provision of the credit and defines the rights and responsibilities of the taxpayer and the Department.  Provisions that the taxpayer will be contractually bound to comply with include, but are not limited to, the following:

 

a)         A detailed description of the project that is the subject of the agreement, including the location and amount of the investment and jobs created or retained.

 

b)         The duration of the credit, the first taxable year for which the credit may be awarded, and the first taxable year in which the credit may be used by the taxpayer.

 

c)         The credit amount that will be allowed for each taxable year.

 

d)         For a project qualified under paragraphs (1), (2), or (4) of subsection (c) of Section 20 of the Act, a requirement that the taxpayer shall maintain operations at the project location a minimum number of years not to exceed 15. For project qualified under paragraph (3) of subsection (c) of Section 20 of the Act, a requirement that the taxpayer shall maintain operations at the project location a minimum number of years not to exceed 10.

 

e)         A specific method for determining the number of new employees and if applicable, retained employees, employed during a taxable year. The agreement will specify that an employee of the taxpayer who was previously employed in Illinois by the taxpayer and whose employment was shifted to the project after the taxpayer entered into the tax credit agreement are not considered new employees. 

 

1)         An employee may be considered a new employee under the agreement if the employee performs a job that was previously performed by an employee who was:

 

A)        treated under the agreement as a new employee; and

 

B)        promoted by the taxpayer to another job.

 

2)         The agreement will specify that the Department may award a credit to the taxpayer with respect to an employee hired prior to the date of the agreement if:

 

A)        the applicant is in receipt of a letter from the Department stating an intent to enter into a credit agreement;

 

B)        the letter described in the first indented paragraph under the employees that are not included in the term "new employees" is issued by the Department not later than 15 days after the effective date of the Act; and

 

C)        the employee was hired after the date the letter described in the first indented paragraph under the employees that are not included in the term "New Employees" was issued.

 

3)         The agreement will address that an employee shall be considered a new employee under the agreement if the employee fills a job vacancy that had been continuously vacant for the 184 day period immediately preceding the date of the agreement. A job vacancy whose incumbent is on approved leave, is locked out or is on strike is not a vacancy.

 

f)         A requirement that the taxpayer shall annually report to the Department the number of new employees, the incremental income tax withheld in connection with the new employees, and any other information the Department deems necessary and appropriate to perform its duties under this Act.

 

g)         A requirement that the Director is authorized to verify with the appropriate State agencies the amounts reported under subsection (f), and after doing so shall issue a certificate to the taxpayer stating that the amounts have been verified.

 

h)         A requirement that the taxpayer shall provide written notification to the Director not more than 30 days after the taxpayer makes or receives a proposal that would transfer the taxpayer's State tax liability obligations to a successor taxpayer.

 

i)          A detailed description of the number of new employees to be hired, and the occupation and payroll of full-time jobs to be created or retained because of the project.

 

j)          The minimum investment the taxpayer will make in capital improvements, the time period for placing the property in service, and the designated location in Illinois for the investment.

 

k)         A requirement that the taxpayer shall provide written notification to the Director and the Director's designee not more than 30 days after the taxpayer determines that the minimum job creation or retention, employment payroll, or investment no longer is or will be achieved or maintained as set forth in the terms and conditions of the agreement. Additionally, the notification should outline to the Department the number of layoffs, date of the layoffs, and detail taxpayer's efforts to provide career and training counseling for the impacted workers with industry-related certifications and trainings.

 

l)          A provision that, if the total number of new employees falls below a specified level, the allowance of credit shall be suspended until the number of new employees equals or exceeds the agreement amount.

 

m)        If applicable, a provision that specifies the statewide baseline at the time of application for retained employees. Additionally, the agreement must have a provision addressing if the total number retained employees falls below the statewide baseline, the allowance of the credit shall be suspended until the number of retained employees equals or exceeds the agreement amount.

 

n)         A detailed description of the items for which the costs incurred by the taxpayer will be included in the limitation on the Credit provided in Section 40 of the Act.

 

o)         A provision stating that if the taxpayer fails to meet either the investment or job creation and retention requirements specified in the agreement during the entire 5-year period beginning on the first day of the first taxable year in which the agreement is executed and ending on the last day of the fifth taxable year after the agreement is executed, then the agreement is automatically terminated on the last day of the fifth taxable year after the agreement is executed, and the taxpayer is not entitled to the award of any credits for any of that 5-year period. (Section 45 of the Act)

 

p)         A requirement that the taxpayer shall annually report to the Department the number of new employees, if applicable, the number of retained employees, and the incremental income tax withheld in connection with the new employees.

 

q)         A provision stating that the taxpayer must provide the reports outlined in Sections 50(a) and (b) and 55 on or before April 15 each year.  The agreement shall state that any taxpayer seeking to claim a credit under this Act that fails to timely submit the report required under Section 50(a) shall not receive a credit for that taxable year unless and until such report is finalized and submitted to the Department.

 

r)          A provision requiring the taxpayer to report annually its contractual obligations or other relationship with a recycling facility for its operations, and report on its own recycling capabilities.  Additionally, the taxpayer shall report annually the percentage of batteries used in electric vehicles recycled throughout the term of the agreement.

 

s)         Any other performance conditions or contract provisions the Department determines are necessary or appropriate.

 

t)          A provision stating that each taxpayer under paragraph (1) of subsection (c) of Section 20 of the Act above shall maintain labor neutrality toward any union organizing campaign for any employees of the taxpayer assigned to work on the premises of the REV Illinois project site.  This subsection shall not apply to an electric vehicle manufacturer, electric vehicle component part manufacturer, electric vehicle power supply manufacturer or any joint venture including an electric vehicle manufacturer, electric vehicle component part manufacturer, an electric vehicle power supply manufacturer, or renewable energy manufacturer, who is subject to collective bargaining agreement entered into prior to the taxpayer filing an application pursuant to the Act. [20 ILCS 686/45]

 

u)         A provision that the taxpayer must annually report to the Department the total project tax benefits received to date.  The report is due no later than May 31 of each year and shall cover the previous calendar year. [20 ILCS 686/30(f)]

 

v)         A provision that the taxpayer shall at all times keep proper books of record and account in accordance with generally accepted accounting principles consistently applied, with the books, records, or papers related to the agreement in the custody or control of the taxpayer open for reasonable Department inspection and audits, and including without limitation, the making of copies of the books, records, or papers, and inspection or appraisal of any the taxpayer or project assets. [20 ILCS 686/15]

 

Section 580.100  Certification of Verification

 

a)         The taxpayer shall notify the Department on forms provided by the Department when the minimum eligible capital improvement investments have been placed in service and the minimum new full-time employee jobs have been created and that retained employees remain employed by the taxpayer.

 

b)         The taxpayer shall provide, for land and/or building acquisition, a copy of the purchase agreement; for building construction or renovation, a contractor's or architect's cost certification; for space rental, a rental/lease agreement.

 

c)         For a taxpayer to be eligible for a certificate of verification, the taxpayer shall provide proof as required by the Department prior to the end of each calendar year, including, but not limited to, attestation by that project:

 

1)         has achieved the level of new employee jobs specified in the agreement;

 

2)         has achieved the level of annual payroll in Illinois specified in the agreement;

 

3)         has achieved the level of capital investment in Illinois specified in the agreement;

 

4)         has achieved and maintained carbon neutrality or one of the certifications specified in the Act;

 

5)         has maintained the statewide baseline employment specified in the agreement; and

 

6)         the taxpayer has materially complied with the terms of the agreement and is not otherwise in violation of any provision of the Act.

 

d)         Upon receipt of valid proof from the taxpayer, the Department shall provide the taxpayer with a Certificate of Verification.

 

e)         A taxpayer claiming a credit under the Act shall submit to the Department of Revenue a copy of the Director's certificate of verification under the Act for the taxable year. However, failure to submit a copy of the certificate with the taxpayer's tax return shall not invalidate a claim for a credit.  [20 ILCS 686/60]

 

Section 580.110  Noncompliance with the Agreement

 

a)         If the Director determines that a Taxpayer who has received a credit under this Act is not complying with the requirements of the agreement or all of the provisions of the Act, the Director shall provide notice to the taxpayer of the alleged noncompliance and allow the taxpayer a hearing under the provisions of the Illinois Administrative Procedure Act.  If, after notice and any hearing, the Director determines that a noncompliance exists, the Director shall issue to the Department of Revenue notice to that effect, stating the Noncompliance Date.  (Section 70 of the Act) Alleged noncompliance shall include:

 

1)         a demonstration that the taxpayer failed materially to comply with the terms and conditions of the agreement;

 

2)         a determination upon investigation that the taxpayer or any of its agents or representative provided false or misleading information to the Department; or

 

3)         a failure to submit the annual report required by Section 30(f) of the Act.

 

b)         The Department shall notify a taxpayer in writing that its certification of verification subject to revocation. Such notice shall include the reason for revocation and the date and location of a hearing to be held pursuant to 56 Ill. Adm. Code 2605.

 

c)         Following revocation of the certification of verification the Department will contact the Director of the Illinois Department of Revenue who may begin proceedings to recover wrongfully exempted State taxes.

 

Section 580.120  Recapture and Reallocation of Recaptured Amounts

 

a)         If, during the term of an agreement, the taxpayer ceases principal operations at a project location that is the subject of that agreement with the intent to terminate operations in the State, the Department and the Department of Revenue shall recapture from the taxpayer the entire credit amount awarded under the agreement prior to the date the taxpayer ceases operations. [20 ILCS 686/70]

 

1)         If the Department determines that a taxpayer ceases principal operations at a project location that is the subject of that agreement with the intent to terminate operations in the State, the Director shall provide notice to the taxpayer of that determination and allow the taxpayer a hearing under the Illinois Administrative Procedure Act [5 ILCS 100]. Example of activities that evidence a cessation of operation at a project location with an intent to terminate operations in the State include, but are not limited to, WARN (Worker Adjustment and Retraining Notification) notices reflecting layoffs in excess of 65% of the full-time employees located at the project site, and public announcements or other media reflecting an intent to relocate operations outside the State.

 

2)         The Department shall notify a taxpayer in writing that the REV construction jobs credit and/or the REV credit is subject to recapture. The notice shall include the reason for revocation of the certification of verification and the date and location of a hearing to be held pursuant to 56 Ill. Adm. Code 2605 (Administrative Hearing Rules).

 

3)         Following a determination that credits received pursuant to an agreement are subject to recapture, the Department will contact the Director of the Illinois Department of Revenue requesting proceedings begin to determine the amounts to be reallocated by the Department pursuant to Section 70 of the Act.

 

b)         The Department shall, subject to appropriation, reallocate the recaptured amount within 6 months to the local workforce investment area, through competitive grants opportunities in accordance with the Grant Accountability and Transparency Act, in which the Project was located for the purposes of workforce development, expanded opportunities for unemployed persons, and expanded opportunities for women and minorities in the workforce. Grant funds shall be distributed in accordance with GATA, and the Department may adopt rules to implement the program. (Section 70 of the Act)

SUBPART C: UTILITY TAX EXEMPTION

 

Section 580.130  Eligibility

 

a)         A taxpayer with a REV Illinois credit for a project that meets the qualifications under paragraphs (1), (2), and (4) of subsection (c) of Section 20 of the Act, may receive an exemption from:

 

1)         the tax imposed at the project site by Section 2-4 of the Electricity Excise Tax Law, and/or

 

2)         any additional charges added to the taxpayer's utility bills at the project site as a pass-on of State utility taxes under Section 9-222 of the Public Utilities Act, and/or

 

b)         to receive a certification for the utility tax exemption, the taxpayer must be registered to self-assess that tax. (Section 95 of the Act)

 

Section 580.140  Form of Application

 

An application for the Utilities Tax Exemption shall be submitted on the standard application form provided by the Department.  An application shall include:

 

a)         Taxpayer's fully executed REV Illinois credit agreement with the Department;

 

b)         Name, address, and Federal Employer Identification Number of the taxpayer.

 

c)         The applicant will attest that it is registered to self-assess the utility tax. (Section 95 of the Act)

 

Section 580.150  Application Approval Process

 

a)         Application Approval Requirements. Applications shall be submitted to the Department and approved or denied in writing within 90 days after receipt. The Department will issue a certification of exemption to the Illinois Department of Revenue for approved applicants, with a copy to the approved applicant.  The application shall be approved if it meets the following requirements:

 

1)         The applicant has an executed REV Illinois agreement; and 

 

2)         The applicant eligibility criteria outlined in Section 580.130 are met. 

 

b)         10-Year Exemption Period.  All certified businesses shall receive a ten-year exemption from Section 2-4 of the Electricity Excise Tax Law, and Section 9-222 of the Public Utilities Act.

 

c)         Failure to Comply.  Applicant shall repay the exempted amount if the applicant fails to comply with the terms and conditions of the executed REV Illinois agreement. [20 ILCS 686/95]

SUBPART D: BUILDING MATERIALS TAX EXEMPTION

 

Section 580.160  Eligibility

 

A taxpayer with a REV Illinois credit for a project that meets the qualifications under Section paragraphs (1), (2), and (4) of subsection (c) of Section 20 of the Act, may receive an exemption from any State or local use tax or retailers' occupation tax on building materials for the construction of its project facilities and incorporated into the real estate in the approved REV Illinois project site. [20 ILCS 686/110]

 

Section 580.170  Form of Application

 

Application for the building materials exemption shall be submitted on the standard application form provided by the Department.  An application shall include:

 

a)         Taxpayer's fully executed REV Illinois credit agreement with the Department;

 

b)         Name, address, and Federal Employer Identification Number of the construction contractor or other entity;

 

c)         The estimated amount of the exemption for each construction contractor or other entity for which a request for a REV Illinois building materials exemption Certificate is made, based on a stated estimated average tax rate and the percentage of the contract that consists of materials; and

 

d)         The period of time over which supplies for project are expected to be purchased.

 

Section 580.180  Application Approval Process

 

a)         Application Approval Requirements. Applications shall be submitted to the Department and approved or denied in writing within 90 days after receipt. The Department will issue a certification of exemption to the Illinois Department of Revenue for approved applicants, with a copy to the approved applicant.  The application shall be approved if it meets the following requirements:

 

1)         The applicant has an executed REV Illinois agreement; and

 

2)         The application information outlined in Section 580.160 is complete.

 

b)         5-Year Exemption Period.  All certified businesses shall receive a five-year exemption from State and local use tax and retailers' occupation tax, in accordance with Section 5m of the Retailers' Occupation Tax Act. 

 

c)         Failure to Comply. Applicant shall repay the exempted amount if the applicant fails to comply with the terms and conditions of the executed REV Illinois Agreement. [20 ILCS 686/105]