Public Act 097-1097
 
SB3619 EnrolledLRB097 18931 HLH 64169 b



    AN ACT concerning revenue.

 
    Be it enacted by the People of the State of Illinois, 
represented in the General Assembly: 

 
    Section 5. The Illinois Income Tax Act is amended  by 
changing Section 220 as follows:
 
    (35 ILCS 5/220)
    Sec. 220. Angel investment credit.
    (a)  As used in this Section: 
    "Applicant" means a corporation, partnership, limited 
liability company, or a natural person that makes an investment 
in a qualified new business venture.  The term "applicant" does 
not include a corporation, partnership, limited liability 
company, or a natural person who has a direct or indirect 
ownership interest of at least 51% in the profits, capital, or 
value of the investment or a related member. 
    "Claimant" means an applicant certified by the Department 
who files a claim for a credit under this Section. 
    "Department" means the Department of Commerce and Economic 
Opportunity. 
    "Qualified new business venture" means a business that is 
registered with the Department under this Section. 
    "Related member" means a person that, with respect to the

investment, 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. 
    (b) For taxable years beginning after December 31, 2010, 
and ending on or before December 31, 2016,  subject to the 
limitations provided in this Section, a claimant  may claim, as 
a credit against the tax imposed under subsections (a) and (b) 
of Section 201 of this Act, an amount equal to 25% of the 
claimant's investment made directly in a qualified new business 
venture. In order for an investment in a qualified new business 
venture to be eligible for tax credits, the business must have 
applied for and received certification under subsection (e) for 
the taxable  year in which the investment was made prior to the 
date on which the investment was made. The credit under this 
Section may not exceed the taxpayer's Illinois income tax 
liability for the taxable year. If the amount of the credit 
exceeds the tax liability for the year, the excess may be 
carried forward and applied to the tax liability of the 5 
taxable years following the excess credit year. The credit 
shall be applied to the earliest year for which there is a tax 
liability. If there are credits from more than one tax year 
that are available to offset a liability, the earlier credit 
shall be applied first. In the case of a partnership or 
Subchapter S Corporation, the credit is allowed to the partners 
or shareholders in accordance with the determination of income 
and distributive share of income under Sections 702 and 704 and 
Subchapter S of the Internal Revenue Code. 
    (c) The maximum amount of an  applicant's investment that 
may be used as the basis for a credit under this Section is 
$2,000,000 for each investment made directly in a qualified new 
business venture. 
    (d) The Department shall implement a program to certify an 
applicant for an angel investment credit.  Upon satisfactory 
review, the Department shall issue a tax credit certificate 
stating the amount of the tax credit to which the applicant is 
entitled.  The Department shall annually certify that the 
claimant's investment has been made and remains in the 
qualified new business venture for no less than 3 years. 
    If an investment  for which a claimant is allowed a credit 
under subsection (b) is held  by the claimant for less than 3 
years, or, if within that period of time the qualified new 
business venture is moved from the State of Illinois, the 
claimant  shall pay to  the Department of Revenue, in the manner 
prescribed by the Department of Revenue, the amount of the 
credit that the claimant received related to  the investment. 
    (e) The Department shall implement a program to register 
qualified new business ventures for purposes of this Section. A 
business desiring registration shall submit an application to 
the Department in each taxable year for which the business 
desires registration. The Department may register the business 
only if the business satisfies all of the following conditions: 
        (1) it has its headquarters in this State; 
        (2) at least 51% of the employees employed by the 
    business are employed in this State; 
        (3) it has the potential for increasing jobs in this 
    State, increasing capital investment in this State, or 
    both, and either of the following apply: 
            (A)  it is principally engaged in innovation in any 
        of the following: manufacturing; biotechnology; 
        nanotechnology; communications; agricultural sciences;  
        clean energy creation or storage technology; 
        processing or assembling products, including medical 
        devices, pharmaceuticals, computer software, computer 
        hardware, semiconductors, other innovative technology 
        products, or other products that are produced using 
        manufacturing methods that are enabled by applying 
        proprietary technology; or providing services that are 
        enabled by applying proprietary technology; or 
            (B) it is undertaking pre-commercialization 
        activity related to proprietary technology that 
        includes conducting research, developing a new product 
        or business process, or developing a service that is 
        principally reliant on applying proprietary 
        technology; 
        (4) it is not  principally engaged in real estate 
    development, insurance, banking, lending, lobbying, 
    political consulting, professional services provided by 
    attorneys, accountants, business consultants, physicians, 
    or health care consultants, wholesale or retail trade, 
    leisure, hospitality, transportation, or construction, 
    except construction of power production plants that derive 
    energy from a renewable energy resource, as defined in 
    Section 1 of the Illinois Power Agency Act;
        (5) at the time it is first certified: 
            (A) it has fewer than 100 employees; 
            (B) it has been in operation in Illinois for not 
        more than 10 consecutive years prior to the year of 
        certification;  and
            (C) it has received not more than $10,000,000 in 
        aggregate private equity investment in cash; 
        (6) (blank); it has been in operation in Illinois for 
    not more than 10 consecutive years prior to the year of 
    certification; and 
        (7) it has received not more than (i) $10,000,000 in 
    aggregate private equity investment in cash or (ii) 
    $4,000,000 in investments that qualified for tax credits 
    under this Section. 
    (f) The Department, in consultation with the Department of 
Revenue, shall adopt rules to administer this Section. The 
aggregate amount of the tax credits that may be claimed under 
this Section for investments made in qualified new business 
ventures shall be limited at $10,000,000 per calendar year. 
    (g) A claimant may not sell or otherwise transfer a credit 
awarded under this Section to another person. 
    (h) On or before March 1 of each year, the Department shall 
report to the Governor and to the General Assembly on the tax 
credit certificates awarded under this Section for the prior 
calendar year. 
        (1) This report must include, for each tax credit 
    certificate awarded: 
            (A) the name of the claimant and the amount of 
        credit awarded or allocated to that claimant; 
            (B) the name and address of the qualified new 
        business venture that received the investment giving 
        rise to the credit and the county in which the 
        qualified new business venture is located; and 
            (C) the date of approval by the Department of the 
        applications for the tax credit certificate. 
        (2) The report must also include: 
            (A) the total number of applicants and amount for 
        tax credit certificates awarded under this Section in 
        the prior calendar year; 
            (B) the total number of applications and amount for 
        which tax credit certificates were issued in the prior 
        calendar year; and 
            (C) the total tax credit certificates and amount 
        authorized under this Section for all calendar years. 

(Source: P.A. 96-939, eff. 1-1-11; 97-507, eff. 8-23-11.)
  
 
    Section 10. The Business Location Efficiency Incentive Act 
is amended  by adding Section 21 as follows:
 
    (35 ILCS 11/21 new)
    Sec. 21. Continuation of Act; validation.
    (a)  The General Assembly finds and declares that:
        (1)  Public Act 97-636, which takes effect on June 1, 
    2012, changed the repeal date set for the Business Location 
    Efficiency Incentive Act from December 31, 2011 to December 
    31, 2016.
        (2)  The  Statute  on  Statutes  sets  forth general
    rules on 
    the repeal of statutes and the  construction  of
    multiple  
    amendments,  but  Section  1  of  that Act also
    states that 
    these rules will not  be  observed  when  the
    result would be 
    "inconsistent with the manifest intent of
    the  General  
    Assembly or repugnant to the context of the
    statute".
        (3)  This amendatory Act of the 97th   General   Assembly 
    manifests
    the  intention  of the General Assembly to extend 
    the repeal  of the Business Location Efficiency Incentive 
    Act  and have the Business Location Efficiency Incentive Act 
    continue  in  effect
    until December 31, 2016.
        (4)  The  Business Location Efficiency Incentive Act was 
    originally enacted to protect, promote, and preserve the  
    general welfare.  Any construction of this Act  that  results  
    in
    the  repeal  of  this Act  on  December 31, 2011 would be
    
    inconsistent with the  manifest  intent  of  the  General
    
    Assembly and repugnant to the context of the Business 
    Location Efficiency Incentive Act.
    (b)  It is hereby declared to have been the intent of the

General Assembly that  the Business Location Efficiency 
Incentive Act not be subject  to  repeal  on  December 31, 2011.
    (c)  The  Business Location Efficiency Incentive Act
shall be 
deemed to have been in continuous effect  since  January 1, 2007 
(the effective date of Public Act 94-966), and it shall 
continue to be in effect henceforward
until  it  is  otherwise  
lawfully  repealed.  All previously
enacted amendments to the  Act  
taking  effect  on  or  after
December 31, 2011, are hereby 
validated.
    (d)  All  actions taken in reliance on or pursuant to the

Business Location Efficiency Incentive Act by the Department of 
Revenue, the Department of Commerce and Economic Opportunity, 
or any other person or entity are
hereby validated.
    (e)  In  order  to ensure the continuing effectiveness of
the 
Business Location Efficiency Incentive Act, it is set forth in  
full  and  re-enacted  by  this
amendatory  Act  of the 97th General 
Assembly.  This re-enactment is intended as a
continuation of 
the Act.  It is not intended to supersede any
amendment to the 
Act that is  enacted  by  the  97th  General
Assembly.
    (f)  The Business Location Efficiency Incentive Act  applies 
to all claims, civil actions, and
proceedings pending on or 
filed on or  before  the  effective
date of this Act.
 
    Section 15. The Business Location Efficiency Incentive Act 
is re-enacted as follows:
 
    (35 ILCS 11/Act title) 
An Act concerning business incentives.
 
    (35 ILCS 11/1)
    (Section scheduled to be repealed on December 31, 2011)

    Sec. 1. Short title. This Act may be cited as the Business 
Location Efficiency Incentive Act.

(Source: P.A. 94-966, eff. 1-1-07.)
 
    (35 ILCS 11/5)
    (Section scheduled to be repealed on December 31, 2011)

    Sec. 5. Definitions. In this Act:
    "Location efficient" means a project that maximizes the use 
of existing investments in infrastructure, avoids or minimizes 
additional government expenditures for new infrastructure, and 
has nearby housing affordable to the permanent workforce of the 
project or has accessible and affordable mass transit or its 
equivalent or some combination of both.
    "Location efficiency report" means a report that is 
prepared by an applicant for increased State economic 
development assistance under Section 10 and follows this Act 
and any related Department guidelines, and that describes the 
existence of (i) affordable workforce housing or (ii) 
accessible and affordable mass transit or its equivalent.
    "Employee housing or transportation remediation plan" 
means a plan to increase affordable housing or transportation 
options, or both, for employees earning up to the median annual 
salary of the workforce at the project. The plan may include, 
but is not limited to, an employer-financed or assisted housing 
program that can be supplemented by State or federal grants, 
shuttle services between the place of employment and existing 
transit stops or other reasonably accessible places, 
facilitation of employee carpooling, or similar services.
     "Accessible and affordable mass transit" means access to 
transit stops with regular and frequent service within one  mile 
from the project site and pedestrian access to transit stops.
    "Affordable workforce housing" means owner-occupied or 
rental housing that costs, based on current census data for the  
municipality where the project is located or any municipality 
within 3 miles of the municipality where the project is 
located,  no more than  35% of the median  salary at the project 
site, exclusive of the highest 10% of the site's salaries.  If 
the project is  located in an unincorporated area, "affordable 
workforce housing" means no more than 35% of the median  salary 
at the project site, excluding the highest 10% of the site's 
salaries, based on the median cost of rental or of 
owner-occupied  housing in the county where the unincorporated 
area is located.
    "Department" means the Department of Commerce and Economic 
Opportunity (DCEO) or its successor agency. 
    "Applicant" means a company or its representative that 
negotiates or applies for economic development assistance from 
DCEO.
    "Economic development assistance" means State tax credits 
and tax exemptions given as an incentive to an eligible company 
after certification by DCEO under the Economic Development for 
a Growing Economy Tax Credit Act (EDGE).
    "Existence of infrastructure" means the existence within 
1,500 feet of the proposed site of roads, sewers, sidewalks, 
and other utilities and a description of the investments or 
improvements, if any, that an applicant expects State or local 
government to make to that infrastructure.

(Source: P.A. 94-966, eff. 1-1-07.)
 
    (35 ILCS 11/10)
    (Section scheduled to be repealed on December 31, 2011)

    Sec. 10. Economic development assistance awards. 
    (a) An applicant that also wants to be considered for 
increased economic development assistance under this Act shall 
submit a location efficiency report.
    (b) DCEO may give an applicant an increased tax credit or 
extension  if the applicant's location efficiency report 
demonstrates that the applicant is seeking assistance for a 
project to be located in an area that satisfies this Act's 
standards for affordable workforce housing  or affordable and 
accessible mass transit. If  the Department determines from the 
location efficiency report that the applicant is seeking 
assistance in an area that is not location efficient, the 
Department may award an increase in State economic development 
assistance if an applicant (i) submits, and the Department 
accepts, an applicant's employee  housing and transportation 
remediation plan or (ii) creates jobs in a labor surplus area 
as defined by the Department of Employment Security at the end 
of each calendar year.
    (c)  Applicants locating  or expanding at location-efficient 
sites, with approved location efficiency plans, or creating 
jobs in labor surplus areas may receive (i) up to 10% more than 
the maximum allowable tax credits for which they are eligible 
under the Economic Development for a Growing Economy Tax Credit 
Act (EDGE), but not to equal or exceed 100% of the applicant's 
tax liability, or (ii) such other adjustment of those tax 
credits, including but not limited to extensions, as the 
Department deems appropriate.
    (d) The Department may provide technical assistance to 
employers requesting assistance in developing an appropriate 
employee housing or transportation plan.

(Source: P.A. 94-966, eff. 1-1-07.)
 
    (35 ILCS 11/15)
    (Section scheduled to be repealed on December 31, 2011)

    Sec. 15. Summaries; progress reports. 
    (a) DCEO shall include summaries of the initial employee 
housing or transportation plans for each assisted project in 
the annual compilation and publication of project progress 
reports required under subsection (d) of Section 20 of the 
Corporate Accountability for Tax Expenditures Act. Companies 
that fail to do so or that make inadequate progress shall have 
their increased tax credit or extension eliminated. Applicants 
and submitted data are subject to all disclosure, reporting, 
and recapture provisions set forth in Public Act 93-552.
    (b) By June 1, 2008 and by June 1 of each year thereafter 
through 2011, the Department shall include, when appropriate, 
data on the outcomes or status of approved employee housing or 
transportation plans in the project progress reports required 
under the Corporate Accountability for Tax Expenditure Act.


(Source: P.A. 94-966, eff. 1-1-07.)
 
    (35 ILCS 11/20)
    (Section scheduled to be repealed on December 31, 2011)

    Sec. 20. Duration of incentives; report to General 
Assembly. 
    (a) Any multi-year incentive awarded under this Act shall 
continue for the time period called for in the agreement with 
the Department and shall not be altered by the repeal of this 
Act.
    (b)  By January 1, 2011, the Department shall submit to the 
Speaker of the House of Representatives and the President of 
the Senate, for assignment to the appropriate committees, a 
report on the incentives awarded under this Act and the 
Department's activities, findings, and recommendations with 
respect to this Act and its extension, amendment, or repeal.  
The report, when acted upon by those committees, shall be 
distributed to each member of the General Assembly.

(Source: P.A. 94-966, eff. 1-1-07.)
 
    (35 ILCS 11/25)
    (Section scheduled to be repealed on December 31, 2011)

    Sec. 25. Repeal. This Act is repealed on December 31, 2016.

(Source: P.A. 97-636, eff. 6-1-12.)
 
    (35 ILCS 11/99)
    (Section scheduled to be repealed on December 31, 2011)


    Sec. 99. Effective date. This Act takes effect January 1, 
2007.


(Source: P.A. 94-966, eff. 1-1-07.)
 

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