Public Act 097-1052
 
HB5111 EnrolledLRB097 16508 HLH 61676 b


  
    AN ACT concerning revenue.
  
 
    Be it enacted by the People of the State of Illinois,
 
represented in the General Assembly:
  
 
 
    Section 5. The Small Business Job Creation Tax Credit Act 
is amended  by changing Sections 10 and 25 as follows:
 
    (35 ILCS 25/10)

    (Text of Section before amendment by P.A. 97-636)
    Sec. 10. Definitions. In this Act:
    "Applicant" means a person that is operating a business 
located within the State of  Illinois that is engaged in 
interstate or intrastate commerce and either:
        (1) has no more than 50  full-time employees, without 
    regard to the location of employment of such employees at 
    the beginning of the incentive period; or  
        (2) hired within the incentive period an employee who 
    had participated as worker-trainee in the Put Illinois to 
    Work Program during 2010. 
    In the case of any person that is a member of a unitary 
business group within the meaning of subdivision (a)(27) of  
Section 1501 of the Illinois Income Tax Act, "applicant" refers 
to the unitary business group.
    "Certificate" means the tax credit certificate issued by 
the Department under Section 35 of this Act. 
    "Certificate of eligibility" means the certificate issued 
by the Department under Section 20 of this Act. 
    "Credit" means the amount awarded by the Department to an 
applicant by issuance of a certificate under Section 35 of this 
Act for each new full-time equivalent employee hired or job 
created.
    "Department" means the Department of Commerce and Economic 
Opportunity.
    "Director" means the Director of the Department.
    "Full-time employee" means an individual who is employed 
for a basic wage 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. An individual for 
whom a W-2 is issued by a Professional Employer Organization is 
a full-time employee if he or she is employed in the service of 
the applicant for a basic wage for at least 35 hours each week 
or renders any other standard of service generally accepted by 
industry custom or practice as full-time employment. For the 
purposes of this Act, such an individual shall be considered a 
full-time employee of the applicant.
    "Professional Employer Organization" (PEO) shall have the 
same  meaning as defined in Section 5-5 of the Economic 
Development for a Growing Economy Tax Credit Act. As used in 
this Section, "Professional Employer Organization" does not 
include a day and temporary labor service agency regulated 
under the Day and Temporary Labor Services Act. 
    "Incentive period" means the period beginning July 1, 2010 
and ending on June 30, 2011.
    "Basic wage" means compensation for employment that is no 
less than $10 per hour or the equivalent salary for a new 
employee.
    "New employee" means a full-time employee: 
        (1) who first became employed by an applicant with less 
    than 50 full-time employees within the incentive period 
    whose hire results in a net increase in the applicant's 
    full-time Illinois employees and who is receiving a basic 
    wage as compensation; or 
        (2) who participated as a worker-trainee in the Put 
    Illinois to Work Program during 2010 and who is 
    subsequently hired during the incentive period by an 
    applicant  and who is receiving a basic wage as 
    compensation. 
    The term "new employee" does not include:
        (1) a person who was previously employed in Illinois by 
    the applicant or a related member prior to the onset of the 
    incentive period; or
        (2) any individual who has a direct or indirect 
    ownership interest of at least 5% in the profits, capital, 
    or value of the applicant or a related member.
    "Noncompliance date" means, in the case of an applicant 
that is not complying with the requirements of the provisions 
of this Act, the day following the last date upon which the 
taxpayer was in compliance with the requirements of the 
provisions of this Act, as determined by the Director, pursuant 
to Section 45 of this Act.
    "Put Illinois to Work Program" means a worker training and 
employment program that was established by the State of 
Illinois with funding from the United States Department of 
Health and Human Services of Emergency Temporary Assistance to 
Needy Families funds authorized by the American Recovery and 
Reinvestment Act of 2009 (ARRA TANF Funds). These ARRA TANF 
funds were in turn used by the State of Illinois to fund the 
Put Illinois to Work Program. 
    "Related member" means a person that, with respect to the 
applicant during any portion of the incentive period, is any 
one of the following,
        (1) An individual, if the individual and the members of 
    the individual'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 outstanding profits, capital, 
    stock, or other ownership interest in the applicant.
        (2) A partnership, estate, or 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 other 
    ownership interest in the applicant.
        (3) 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 
    applicant and any other related member own, in the 
    aggregate, directly, indirectly, beneficially, or 
    constructively, at least 50% of the value of the 
    corporation's outstanding stock.
        (4) 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 
    other ownership interest in the applicant.
        (5) A person to or from whom there is attribution of 
    stock ownership in accordance with Section 1563(e) of the 
    Internal Revenue Code, except that for purposes of 
    determining whether a person is a related member under this 
    paragraph, "20%" shall be substituted for "5%" whenever 
    "5%" appears in Section 1563(e) of the Internal Revenue 
    Code.

(Source: P.A. 96-888, eff. 4-13-10; 96-1498, eff. 1-18-11.)
 
    (Text of Section after amendment by P.A. 97-636)
    Sec. 10. Definitions. In this Act:
    "Applicant" means a person that is operating a business 
located within the State of  Illinois that is engaged in 
interstate or intrastate commerce and either:
        (1) has no more than 50  full-time employees, without 
    regard to the location of employment of such employees at 
    the beginning of the incentive period; or  
        (2) hired within the incentive period an employee who 
    had participated as worker-trainee in the Put Illinois to 
    Work Program during 2010. 
    In the case of any person that is a member of a unitary 
business group within the meaning of subdivision (a)(27) of  
Section 1501 of the Illinois Income Tax Act, "applicant" refers 
to the unitary business group.
    "Certificate" means the tax credit certificate issued by 
the Department under Section 35 of this Act. 
    "Certificate of eligibility" means the certificate issued 
by the Department under Section 20 of this Act. 
    "Credit" means the amount awarded by the Department to an 
applicant by issuance of a certificate under Section 35 of this 
Act for each new full-time equivalent employee hired or job 
created.
    "Department" means the Department of Commerce and Economic 
Opportunity.
    "Director" means the Director of the Department.
    "Full-time employee" means an individual who is employed 
for a basic wage 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. An individual for 
whom a W-2 is issued by a Professional Employer Organization is 
a full-time employee if he or she is employed in the service of 
the applicant for a basic wage for at least 35 hours each week 
or renders any other standard of service generally accepted by 
industry custom or practice as full-time employment. For the 
purposes of this Act, such an individual shall be considered a 
full-time employee of the applicant.
    "Professional Employer Organization" (PEO) shall have the 
same  meaning as defined in Section 5-5 of the Economic 
Development for a Growing Economy Tax Credit Act. As used in 
this Section, "Professional Employer Organization" does not 
include a day and temporary labor service agency regulated 
under the Day and Temporary Labor Services Act. 
    "Incentive period" means the period beginning on July 1 and 
ending on June 30 of the following year. The first incentive 
period shall begin on July 1, 2010 and the last incentive 
period shall end on June 30, 2016.
    "Basic wage" means compensation for employment that is no 
less than $10 per hour or the equivalent salary for a new 
employee.
    "New employee" means a full-time employee: 
        (1) who first became employed by an applicant with less 
    than 50 full-time employees within the incentive period 
    whose hire results in a net increase in the applicant's 
    full-time Illinois employees and who is receiving a basic 
    wage as compensation; or 
        (2) who participated as a worker-trainee in the Put 
    Illinois to Work Program during 2010 and who is 
    subsequently hired during the incentive period by an 
    applicant  and who is receiving a basic wage as 
    compensation. 
    The term "new employee" does not include:
        (1) a person who was previously employed in Illinois by 
    the applicant or a related member prior to the onset of the 
    incentive period; or
        (2) any individual who has a direct or indirect 
    ownership interest of at least 5% in the profits, capital, 
    or value of the applicant or a related member.
    "Noncompliance date" means, in the case of an applicant 
that is not complying with the requirements of the provisions 
of this Act, the day following the last date upon which the 
taxpayer was in compliance with the requirements of the 
provisions of this Act, as determined by the Director, pursuant 
to Section 45 of this Act.
    "Put Illinois to Work Program" means a worker training and 
employment program that was established by the State of 
Illinois with funding from the United States Department of 
Health and Human Services of Emergency Temporary Assistance to 
Needy Families funds authorized by the American Recovery and 
Reinvestment Act of 2009 (ARRA TANF Funds). These ARRA TANF 
funds were in turn used by the State of Illinois to fund the 
Put Illinois to Work Program. 
    "Related member" means a person that, with respect to the 
applicant during any portion of the incentive period, is any 
one of the following,
        (1) An individual, if the individual and the members of 
    the individual'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 outstanding profits, capital, 
    stock, or other ownership interest in the applicant.
        (2) A partnership, estate, or 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 other 
    ownership interest in the applicant.
        (3) 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 
    applicant and any other related member own, in the 
    aggregate, directly, indirectly, beneficially, or 
    constructively, at least 50% of the value of the 
    corporation's outstanding stock.
        (4) 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 
    other ownership interest in the applicant.
        (5) A person to or from whom there is attribution of 
    stock ownership in accordance with Section 1563(e) of the 
    Internal Revenue Code, except that for purposes of 
    determining whether a person is a related member under this 
    paragraph, "20%" shall be substituted for "5%" whenever 
    "5%" appears in Section 1563(e) of the Internal Revenue 
    Code.

(Source: P.A. 96-888, eff. 4-13-10; 96-1498, eff. 1-18-11; 
97-636, eff. 6-1-12.)
 
    (35 ILCS 25/25)

    (Text of Section before amendment by P.A. 97-636)
    Sec. 25. Tax credit. 
    (a) Subject to the conditions set forth in this Act, an 
applicant is entitled to a credit against payment of  taxes 
withheld under Section 704A of the Illinois Income Tax Act: 
        (1) for new employees who participated as 
    worker-trainees in the Put Illinois to Work Program during 
    2010: 
            (A) in the first calendar year ending on or after 
        the date that is 6 months after December 31, 2010, or 
        the date of hire, whichever is later. Under this 
        subparagraph, the applicant is entitled to one-half of 
        the credit allowable for each new employee who is 
        employed for at least 6 months after the date of hire; 
        and 
            (B) in the first calendar year ending on or after 
        the date that is 12 months after December 31, 2010, or 
        the date of hire, whichever is later. Under this 
        subparagraph, the applicant is entitled to one-half of 
        the credit allowable for each new employee who is 
        employed for at least 12 months after the date of hire; 
         (2) for all other new employees, in the first calendar 
    year ending on or after the date that is 12 months after 
    the date of hire of  a new employee. The credit shall be 
    allowed as a credit to an applicant for each full-time 
    employee hired during the incentive period that results in 
    a net increase in full-time Illinois employees, where the 
    net increase in the employer's full-time Illinois 
    employees is maintained for at least 12 months. 
    (b) The Department shall make credit awards under this Act 
to further job creation.
    (c) The credit shall be claimed for the first calendar year 
ending on or after the date on which the certificate is issued 
by the Department.
    (d) The credit shall not exceed $2,500 per new employee 
hired.
    (e) The net increase in full-time Illinois employees, 
measured on an annual full-time equivalent basis, shall be the 
total number of full-time Illinois employees of the applicant 
on  June 30, 2011, minus the number of full-time Illinois 
employees employed by the employer on July 1, 2010.  For 
purposes of the calculation, an employer that begins doing 
business in this State during the incentive period, as 
determined by the Director, shall be treated as having zero 
Illinois employees on July 1, 2010.
    (f) The net increase in the number of full-time Illinois 
employees of the applicant under subsection (e) must be 
sustained continuously for at least 12 months, starting with 
the date of hire of a new employee during the incentive period.  
Eligibility for the credit does not depend on the continuous 
employment of any particular individual. For purposes of this 
subsection (f), if a new employee ceases to be employed before 
the completion of the 12-month period for any reason, the net 
increase in the number of full-time Illinois employees shall be 
treated as continuous if a different new employee is hired as a 
replacement within a reasonable time for the same position.

    (g) The Department shall promulgate rules to enable an 
applicant for which a PEO has been contracted to issue W-2s and 
make payment of taxes withheld under Section 704A of the 
Illinois Income Tax Act for new employees to retain the benefit 
of tax credits to which the applicant is otherwise entitled 
under this Act. 
(Source: P.A. 96-888, eff. 4-13-10; 96-1498, eff. 1-18-11.)
 
    (Text of Section after amendment by P.A. 97-636)
    Sec. 25. Tax credit. 
    (a) Subject to the conditions set forth in this Act, an 
applicant is entitled to a credit against payment of  taxes 
withheld under Section 704A of the Illinois Income Tax Act: 
        (1) for new employees who participated as 
    worker-trainees in the Put Illinois to Work Program during 
    2010: 
            (A) in the first calendar year ending on or after 
        the date that is 6 months after December 31, 2010, or 
        the date of hire, whichever is later. Under this 
        subparagraph, the applicant is entitled to one-half of 
        the credit allowable for each new employee who is 
        employed for at least 6 months after the date of hire; 
        and 
            (B) in the first calendar year ending on or after 
        the date that is 12 months after December 31, 2010, or 
        the date of hire, whichever is later. Under this 
        subparagraph, the applicant is entitled to one-half of 
        the credit allowable for each new employee who is 
        employed for at least 12 months after the date of hire; 
         (2) for all other new employees, in the first calendar 
    year ending on or after the date that is 12 months after 
    the date of hire of  a new employee. The credit shall be 
    allowed as a credit to an applicant for each full-time 
    employee hired during the incentive period that results in 
    a net increase in full-time Illinois employees, where the 
    net increase in the employer's full-time Illinois 
    employees is maintained for at least 12 months. 
    (b) The Department shall make credit awards under this Act 
to further job creation.
    (c) The credit shall be claimed for the first calendar year 
ending on or after the date on which the certificate is issued 
by the Department.
    (d) The credit shall not exceed $2,500 per new employee 
hired.
    (e) The net increase in full-time Illinois employees, 
measured on an annual full-time equivalent basis, shall be the 
total number of full-time Illinois employees of the applicant 
on the final day of the incentive period, minus the number of 
full-time Illinois employees employed by the employer on the 
first day of that same incentive period.  For purposes of the 
calculation, an employer that begins doing business in this 
State during the incentive period, as determined by the 
Director, shall be treated as having zero Illinois employees on 
the first day of the incentive period.
    (f) The net increase in the number of full-time Illinois 
employees of the applicant under subsection (e) must be 
sustained continuously for at least 12 months, starting with 
the date of hire of a new employee during the incentive period.  
Eligibility for the credit does not depend on the continuous 
employment of any particular individual. For purposes of this 
subsection (f), if a new employee ceases to be employed before 
the completion of the 12-month period for any reason, the net 
increase in the number of full-time Illinois employees shall be 
treated as continuous if a different new employee is hired as a 
replacement within a reasonable time for the same position.

    (g) The Department shall promulgate rules to enable an 
applicant for which a PEO has been contracted to issue W-2s and 
make payment of taxes withheld under Section 704A of the 
Illinois Income Tax Act for new employees to retain the benefit 
of tax credits to which the applicant is otherwise entitled 
under this Act. 
(Source: P.A. 96-888, eff. 4-13-10; 96-1498, eff. 1-18-11; 
97-636, eff. 6-1-12.)
  
 
    Section 95. No acceleration or delay. Where this Act makes 
changes in a statute that is represented in this Act by text 
that is not yet or no longer in effect (for example, a Section 
represented by multiple versions), the use of that text does 
not accelerate or delay the taking effect of (i) the changes 
made by this Act or (ii) provisions derived from any other 
Public Act.
 

    Section 99. Effective date. This Act takes effect upon 
becoming law.