Bill Text: IL SB1232 | 2019-2020 | 101st General Assembly | Introduced


Bill Title: Amends the Small Business Job Creation Tax Credit Act. Provides that the Act applies for a second set of incentive periods beginning on July 1, 2019 and ending on June 30, 2026. Provides that certain provisions concerning employees who had participated as worker-trainees in the Put Illinois to Work Program during 2010 do not apply to the second set of incentive periods. Provides that the term "basic wage" means not less than $15 per hour (currently, $10). Effective immediately.

Spectrum: Moderate Partisan Bill (Democrat 16-2)

Status: (Introduced) 2019-07-01 - Added as Co-Sponsor Sen. John F. Curran [SB1232 Detail]

Download: Illinois-2019-SB1232-Introduced.html


101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
SB1232

Introduced 2/6/2019, by Sen. Heather A. Steans - Thomas Cullerton

SYNOPSIS AS INTRODUCED:
35 ILCS 25/10
35 ILCS 25/25
35 ILCS 25/35

Amends the Small Business Job Creation Tax Credit Act. Provides that the Act applies for a second set of incentive periods beginning on July 1, 2019 and ending on June 30, 2026. Provides that certain provisions concerning employees who had participated as worker-trainees in the Put Illinois to Work Program during 2010 do not apply to the second set of incentive periods. Provides that the term "basic wage" means not less than $15 per hour (currently, $10). Effective immediately.
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FISCAL NOTE ACT MAY APPLY

A BILL FOR

SB1232LRB101 07040 HLH 53549 b
1 AN ACT concerning revenue.
2 Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4 Section 5. The Small Business Job Creation Tax Credit Act
5is amended by changing Sections 10, 25, and 35 as follows:
6 (35 ILCS 25/10)
7 Sec. 10. Definitions. In this Act:
8 "Applicant" means a person that is operating a business
9located within the State of Illinois that is engaged in
10interstate or intrastate commerce and has fewer than 50
11full-time employees, without regard to the location of
12employment of such employees at the beginning of the incentive
13period. either:
14 (1) has no more than 50 full-time employees, without
15 regard to the location of employment of such employees at
16 the beginning of the incentive period; or
17 (2) hired within the incentive period an employee who
18 had participated as worker-trainee in the Put Illinois to
19 Work Program during 2010.
20 In the case of any person that is a member of a unitary
21business group within the meaning of subdivision (a)(27) of
22Section 1501 of the Illinois Income Tax Act, "applicant" refers
23to the unitary business group.

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1 "Certificate" means the tax credit certificate issued by
2the Department under Section 35 of this Act.
3 "Certificate of eligibility" means the certificate issued
4by the Department under Section 20 of this Act.
5 "Credit" means the amount awarded by the Department to an
6applicant by issuance of a certificate under Section 35 of this
7Act for each new full-time equivalent employee hired or job
8created.
9 "Department" means the Department of Commerce and Economic
10Opportunity.
11 "Director" means the Director of the Department.
12 "Full-time employee" means an individual who is employed
13for a basic wage for at least 35 hours each week or who renders
14any other standard of service generally accepted by industry
15custom or practice as full-time employment. An individual for
16whom a W-2 is issued by a Professional Employer Organization is
17a full-time employee if he or she is employed in the service of
18the applicant for a basic wage for at least 35 hours each week
19or renders any other standard of service generally accepted by
20industry custom or practice as full-time employment. For the
21purposes of this Act, such an individual shall be considered a
22full-time employee of the applicant.
23 "Professional Employer Organization" (PEO) shall have the
24same meaning as defined in Section 5-5 of the Economic
25Development for a Growing Economy Tax Credit Act. As used in
26this Section, "Professional Employer Organization" does not

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1include a day and temporary labor service agency regulated
2under the Day and Temporary Labor Services Act.
3 "Incentive period" means the period beginning on July 1 and
4ending on June 30 of the following year. The first set of
5incentive periods period shall begin on July 1, 2010 and the
6last incentive period shall end on June 30, 2016. The second
7set of incentive periods shall begin on July 1, 2019 and end on
8June 30, 2026.
9 "Basic wage" means compensation for employment that is no
10less than $15 $10 per hour or the equivalent salary for a new
11employee.
12 "New employee" means a full-time employee who first became
13employed by an applicant with fewer than 50 full-time employees
14within the incentive period, whose hire results in a net
15increase in the applicant's number of full-time Illinois
16employees, and who is receiving a basic wage as compensation. :
17 (1) who first became employed by an applicant with less
18 than 50 full-time employees within the incentive period
19 whose hire results in a net increase in the applicant's
20 full-time Illinois employees and who is receiving a basic
21 wage as compensation; or
22 (2) who participated as a worker-trainee in the Put
23 Illinois to Work Program during 2010 and who is
24 subsequently hired during the incentive period by an
25 applicant and who is receiving a basic wage as
26 compensation.

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1 The term "new employee" does not include:
2 (1) a person who was previously employed in Illinois by
3 the applicant or a related member prior to the onset of the
4 incentive period; or
5 (2) any individual who has a direct or indirect
6 ownership interest of at least 5% in the profits, capital,
7 or value of the applicant or a related member.
8 "Noncompliance date" means, in the case of an applicant
9that is not complying with the requirements of the provisions
10of this Act, the day following the last date upon which the
11taxpayer was in compliance with the requirements of the
12provisions of this Act, as determined by the Director, pursuant
13to Section 45 of this Act.
14 "Put Illinois to Work Program" means a worker training and
15employment program that was established by the State of
16Illinois with funding from the United States Department of
17Health and Human Services of Emergency Temporary Assistance for
18Needy Families funds authorized by the American Recovery and
19Reinvestment Act of 2009 (ARRA TANF Funds). These ARRA TANF
20funds were in turn used by the State of Illinois to fund the
21Put Illinois to Work Program.
22 "Related member" means a person that, with respect to the
23applicant during any portion of the incentive period, is any
24one of the following,
25 (1) An individual, if the individual and the members of
26 the individual's family (as defined in Section 318 of the

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1 Internal Revenue Code) own directly, indirectly,
2 beneficially, or constructively, in the aggregate, at
3 least 50% of the value of the outstanding profits, capital,
4 stock, or other ownership interest in the applicant.
5 (2) A partnership, estate, or trust and any partner or
6 beneficiary, if the partnership, estate, or trust and its
7 partners or beneficiaries own directly, indirectly,
8 beneficially, or constructively, in the aggregate, at
9 least 50% of the profits, capital, stock, or other
10 ownership interest in the applicant.
11 (3) A corporation, and any party related to the
12 corporation in a manner that would require an attribution
13 of stock from the corporation under the attribution rules
14 of Section 318 of the Internal Revenue Code, if the
15 applicant and any other related member own, in the
16 aggregate, directly, indirectly, beneficially, or
17 constructively, at least 50% of the value of the
18 corporation's outstanding stock.
19 (4) A corporation and any party related to that
20 corporation in a manner that would require an attribution
21 of stock from the corporation to the party or from the
22 party to the corporation under the attribution rules of
23 Section 318 of the Internal Revenue Code, if the
24 corporation and all such related parties own, in the
25 aggregate, at least 50% of the profits, capital, stock, or
26 other ownership interest in the applicant.

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1 (5) A person to or from whom there is attribution of
2 stock ownership in accordance with Section 1563(e) of the
3 Internal Revenue Code, except that for purposes of
4 determining whether a person is a related member under this
5 paragraph, "20%" shall be substituted for "5%" whenever
6 "5%" appears in Section 1563(e) of the Internal Revenue
7 Code.
8(Source: P.A. 100-863, eff. 8-14-18.)
9 (35 ILCS 25/25)
10 Sec. 25. Tax credit.
11 (a) Subject to the conditions set forth in this Act, an
12applicant is entitled to a credit against payment of taxes
13withheld under Section 704A of the Illinois Income Tax Act in
14the first calendar year ending on or after the date that is 12
15months after the date of hire of a new employee. The credit
16shall be allowed as a credit to an applicant for each full-time
17employee hired during the incentive period that results in a
18net increase in full-time Illinois employees, if the net
19increase in the employer's full-time Illinois employees is
20maintained for at least 12 months. :
21 (1) for new employees who participated as
22 worker-trainees in the Put Illinois to Work Program during
23 2010:
24 (A) in the first calendar year ending on or after
25 the date that is 6 months after December 31, 2010, or

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1 the date of hire, whichever is later. Under this
2 subparagraph, the applicant is entitled to one-half of
3 the credit allowable for each new employee who is
4 employed for at least 6 months after the date of hire;
5 and
6 (B) in the first calendar year ending on or after
7 the date that is 12 months after December 31, 2010, or
8 the date of hire, whichever is later. Under this
9 subparagraph, the applicant is entitled to one-half of
10 the credit allowable for each new employee who is
11 employed for at least 12 months after the date of hire;
12 (2) for all other new employees, in the first calendar
13 year ending on or after the date that is 12 months after
14 the date of hire of a new employee. The credit shall be
15 allowed as a credit to an applicant for each full-time
16 employee hired during the incentive period that results in
17 a net increase in full-time Illinois employees, where the
18 net increase in the employer's full-time Illinois
19 employees is maintained for at least 12 months.
20 (b) The Department shall make credit awards under this Act
21to further job creation.
22 (c) The credit shall be claimed for the first calendar year
23ending on or after the date on which the certificate is issued
24by the Department.
25 (d) The credit shall not exceed $2,500 per new employee
26hired.

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1 (e) The net increase in full-time Illinois employees,
2measured on an annual full-time equivalent basis, shall be the
3total number of full-time Illinois employees of the applicant
4on the final day of the incentive period, minus the number of
5full-time Illinois employees employed by the employer on the
6first day of that same incentive period. For purposes of the
7calculation, an employer that begins doing business in this
8State during the incentive period, as determined by the
9Director, shall be treated as having zero Illinois employees on
10the first day of the incentive period.
11 (f) The net increase in the number of full-time Illinois
12employees of the applicant under subsection (e) must be
13sustained continuously for at least 12 months, starting with
14the date of hire of a new employee during the incentive period.
15Eligibility for the credit does not depend on the continuous
16employment of any particular individual. For purposes of this
17subsection (f), if a new employee ceases to be employed before
18the completion of the 12-month period for any reason, the net
19increase in the number of full-time Illinois employees shall be
20treated as continuous if a different new employee is hired as a
21replacement within a reasonable time for the same position.
22 (g) The Department shall promulgate rules to enable an
23applicant for which a PEO has been contracted to issue W-2s and
24make payment of taxes withheld under Section 704A of the
25Illinois Income Tax Act for new employees to retain the benefit
26of tax credits to which the applicant is otherwise entitled

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1under this Act.
2(Source: P.A. 96-888, eff. 4-13-10; 96-1498, eff. 1-18-11;
397-636, eff. 6-1-12; 97-1052, eff. 8-23-12.)
4 (35 ILCS 25/35)
5 Sec. 35. Application for award of tax credit; tax credit
6certificate.
7 (a) On or after the conclusion of the 12-month period (or
86-month period, for purposes of subparagraph (A) of item (1) of
9subsection (a) of Section 25) after a new employee has been
10hired, an applicant shall file with the Department an
11application for award of a credit. The application shall
12include the following:
13 (1) The names, Social Security numbers, job
14 descriptions, salary or wage rates, and dates of hire of
15 the new employees with respect to whom the credit is being
16 requested, and an indication of whether each new employee
17 listed participated as a worker-trainee in the Put Illinois
18 to Work Program.
19 (2) A certification that each new employee listed has
20 been retained on the job for one year (or 6 months, for
21 purposes of subparagraph (A) of item (1) of subsection (a)
22 of Section 25) from the date of hire.
23 (3) The number of new employees hired by the applicant
24 during the incentive period.
25 (4) The net increase in the number of full-time

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1 Illinois employees of the applicant (including the new
2 employees listed in the request) between the beginning of
3 the incentive period and the dates on which the new
4 employees listed in the request were hired. This
5 requirement does not apply for tax credits the applicant is
6 seeking because the new employee had participated as a
7 worker-trainee in the Put Illinois to Work Program.
8 (5) An agreement that the Director is authorized to
9 verify with the appropriate State agencies the information
10 contained in the request before issuing a certificate to
11 the applicant.
12 (6) Any other information the Department determines to
13 be appropriate.
14 (b) Although an application may be filed at any time after
15the conclusion of the 12-month period (or 6-month period, for
16purposes of subparagraph (A) of item (1) of subsection (a) of
17Section 25) after a new employee was hired, an application
18filed more than 90 days after the earliest date on which it
19could have been filed shall not be awarded any credit if, prior
20to the date it is filed, the Department has received
21applications under this Section for credits totaling more than
22$50,000,000.
23 (c) The Department shall issue a certificate to each
24applicant awarded a credit under this Act. The certificate
25shall include the following:
26 (1) The name and taxpayer identification number of the

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1 applicant.
2 (2) The date on which the certificate is issued.
3 (3) The credit amount that will be allowed.
4 (4) Any other information the Department determines to
5 be appropriate.
6(Source: P.A. 96-888, eff. 4-13-10; 96-1498, eff. 1-18-11.)
7 Section 99. Effective date. This Act takes effect upon
8becoming law.
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