HB2958eng 98TH GENERAL ASSEMBLY

HB2958 Engrossed LRB098 10953 JWD 41561 b

AN ACT concerning economic planning.

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

Section 1. Short title. This Act may be cited as the Economic Policy Planning Act.

Section 5. Findings and purpose. The General Assembly finds that:

(a) The State of Illinois does not currently have a comprehensive policy on economic development incentives. Instead, the State has a wide variety of incentives reducing specific State or local tax burdens that are provided mostly upon request by citizens and corporations. This creates an uncertain tax environment for businesses in Illinois and, as witnessed during the fall 2011 veto session, can leave the State vulnerable to competition from other states that have tried to entice businesses with financial incentives to relocate or expand outside of Illinois.

(b) In Fiscal Year 2010, the State spent a total of $313,600,000 on tax incentives for businesses. According to 2009 Illinois Department of Revenue data, only 0.7% of the more than 450,000 corporations filing taxes in Illinois take advantage of these tax incentives.

(c) The State of Illinois must develop a formal economic development policy to guide the awarding of incentives. A transparent economic development policy would effectively curb economic brinksmanship by Illinois businesses by creating a predictable process for applying for and earning tax incentives. Such a policy needs to be in place before the State renews, expands, or creates any economic development incentives, and to guide policy makers in determining which tax incentives are most beneficial to the State.

Section 10. Economic Policy Planning Commission.

(a) There is created the Economic Policy Planning Commission. The Commission shall have 10 voting members appointed as follows:

One member of the General Assembly, who shall serve as co-chairperson, and one member of the public appointed by the President of the Senate;

One member of the General Assembly and one member of the public appointed by the Minority Leader of the Senate;

One member of the General Assembly, who shall serve as co-chairperson, and one member of the public appointed by the Speaker of the House of Representatives;

One member of the General Assembly and one member of the public appointed by the Minority Leader of the House of Representatives; and

2 members appointed by the Governor.

The Director of the Department of Commerce and Economic Opportunity, or his or her designee, the Director of the Department of Revenue, or his or her designee, the Secretary of the Department of Transportation, or his or her designee, the Executive Director of the Capital Development Board, or his or her designee, and the Executive Director of the Illinois Finance Authority, or his or her designee, shall serve as non-voting, ex-officio members of the Commission.

(b) The co-chairpersons may appoint such other individuals as they may deem helpful as non-voting members of the Commission.

(c) The members of the Commission shall serve without compensation, but may be reimbursed for expenses from funds appropriated for that purpose.

(d) The Department of Commerce and Economic Opportunity shall provide administrative support, together with meeting space, to assist the Commission in fulfilling its mission.

(e) All appointments required by this Section shall be made within 60 days of the effective date of this Act.

Section 15. Meetings.

(a) The Commission shall conduct meetings, conference calls, or both, as the co-chairpersons shall direct, and shall conduct at least 2 public hearings, as the co-chairpersons shall direct, before filing its final written findings and recommendations as provided in Section 25 of this Act. Additional public hearings may be held at the discretion of the co-chairpersons.

(b) The public hearings shall be held at geographically convenient locations around the State. The locations, dates and times of the public hearings shall be determined by the co-chairpersons, on a schedule that is publicly announced in area newspapers, State buildings, websites, and other media no less than 2 weeks in advance of each hearing. All hearings shall be completed at least 2 months prior to the time for submission of the final written findings and recommendations as provided in Section 25 of this Act.

(c) At the public hearings, the Commission shall allow interested persons to present their views and comments and to present any written literature, statements, articles, or comments. Based on attendance and time frames, the Commission may set limits for the time each speaker may comment. These hearings may be continued if all persons could not be heard.

Section 20. Activities and purpose.

(a) The Commission will conduct a thorough review of the current economic condition of the State of Illinois, which may include its natural resources, geography, infrastructure, businesses, workforce, and educational system, within the context of the national and international economy.

(b) The Commission will also conduct a thorough review of relevant and available studies relating to the current economic condition of the State of Illinois as compared to other states, and the nation, including those studies conducted by governments, universities, and reputable groups and institutions. The Commission shall also conduct a review of all laws and regulations relating to economic planning in the State of Illinois, other states, and the nation.

(c) Through the public hearings required in Section 15 of this Act and otherwise, the Commission will gather information, review studies, evaluate testimony, and consider and summarize written comments received, and shall make written findings and recommendations as required in Section 25 of this Act.

Section 25. Report; legislation.

(a) The Commission shall make its report to the General Assembly on or before December 31, 2014. The report of the Commission shall detail those findings and recommendations supported by a majority of the voting members.

(b) The findings and recommendations shall include, but are not limited to:

(1) Specific goals and objectives for the economy of the State of Illinois, including but not limited to: target economic sectors, business retention or recruitment, geographic focus, job creation, blight mitigation, improving economically distressed neighborhoods, and environmental improvements. The goals and objectives shall be stated in measurable terms, so that they can be used to provide context and accountability for the use of economic development incentives.

(2) Specified types of economic development incentives, including eligibility and qualifications for individual firms, maximum funding for particular programs, the jurisdictions that will use them and the extent to which those jurisdictions may use them.

(3) A clearly defined evaluation process for each type of economic development incentive, including, but not limited to:

(A) how a proposal measures up to established economic development criteria;

(B) a cost/benefit analysis;

(C) an evaluation of tax base impact, both in terms of increases in taxable value and, where a Tax Increment Financing District is proposed, the impact on all overlapping taxing jurisdictions;

(D) an analysis of the impact of a project on existing businesses;

(E) a determination of whether the project would have proceeded if the incentive is not provided; and

(F) the required documentation for demonstrating these criteria.

(4) Specific performance standards for each project receiving economic development incentives, to help gauge the effectiveness of both the specific economic development incentives provided as well as the State's overall economic development program, together with the recovery of promised financial benefits, through clawbacks or linkage agreements, of recipients failing to fulfill their commitments.

(5) A process for ongoing and regular monitoring of the economic development incentives granted and the performance of each project receiving incentives, including the designation or creation of a State agency or other body to provide the monitoring. Ongoing and regular monitoring must include, at a minimum, the examination of performance standards relative to each economic development agreement, and the determination of whether the goals for each project have been achieved within the defined timeframe.

(c) In addition to the report, the Commission shall provide to the General Assembly its recommendations in the form of legislation. The Legislative Reference Bureau shall provide drafting assistance to the Commission.

Section 30. Repealer. This Act is repealed on December 31, 2015.

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