Bill Text: IL SB0805 | 2023-2024 | 103rd General Assembly | Engrossed

---

Bill Title: Creates the Master Development Plan Recognition Act. Provides that certain contributions made by the State or units of local government are considered made pursuant to a master development plan within the meaning of Section 118 of the Internal Revenue Code of 1986. Amends the Illinois Income Tax Act. Creates a deduction for capital contributions that are made pursuant to a master development plan and that are included in the taxpayer's federal taxable income for the taxable year under Section 118 of the Internal Revenue Code. Effective immediately.

Spectrum: Partisan Bill (Democrat 4-0)

Status: (Failed) 2025-01-07 - Session Sine Die [SB0805 Detail]

Download: Illinois-2023-SB0805-Engrossed.html

---

SB0805 Engrossed LRB103 03260 HLH 48266 b
AN ACT concerning revenue.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Economic Development for a Growing Economy
Tax Credit Act is amended by changing Sections 5-5 and 5-15 as
follows:
(35 ILCS 10/5-5)
Sec. 5-5. Definitions. As used in this Act:
"Agreement" means the Agreement between a Taxpayer and the
Department under the provisions of Section 5-50 of this Act.
"Applicant" means a Taxpayer that is operating a business
located or that the Taxpayer plans to locate within the State
of Illinois and that is engaged in interstate or intrastate
commerce for the purpose of manufacturing, processing,
assembling, warehousing, or distributing products, conducting
research and development, providing tourism services, or
providing services in interstate commerce, office industries,
or agricultural processing, but excluding retail, retail food,
health, or professional services. "Applicant" does not include
a Taxpayer who closes or substantially reduces an operation 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

SB0805 Engrossed - 2 - LRB103 03260 HLH 48266 b
location in the State, provided that existing operations of a
similar nature located within the State are not closed or
substantially reduced. 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 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 the municipality or county.
"Credit" means the amount agreed to between the Department
and Applicant under this Act, but not to exceed the lesser of:
(1) the sum of (i) 50% of the Incremental Income Tax
attributable to New Employees at the Applicant's project and
(ii) 10% of the training costs of New Employees; or (2) 100% of
the Incremental Income Tax attributable to New Employees at
the Applicant's project. However, if the project is located in
an underserved area, then the amount of the Credit may not
exceed the lesser of: (1) the sum of (i) 75% of the Incremental
Income Tax attributable to New Employees at the Applicant's
project and (ii) 10% of the training costs of New Employees; or
(2) 100% of the Incremental Income Tax attributable to New

SB0805 Engrossed - 3 - LRB103 03260 HLH 48266 b
Employees at the Applicant's project. If the project is not
located in an underserved area and the 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 25% of the Incremental Income Tax
attributable to retained employees at the Applicant's project.
If the project is located in an underserved area and the
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 50% of the Incremental
Income Tax attributable to retained employees at the
Applicant's project.
"Department" means the Department of Commerce and Economic
Opportunity.
"Director" means the Director of Commerce and Economic
Opportunity.
"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. 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 or who renders any other standard of service
generally accepted by industry custom or practice as full-time
employment to Applicant.

SB0805 Engrossed - 4 - LRB103 03260 HLH 48266 b
"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.
"New Construction EDGE Agreement" means the Agreement
between a Taxpayer and the Department under the provisions of
Section 5-51 of this Act.
"New Construction EDGE Credit" means an amount agreed to
between the Department and the Applicant under this Act as
part of a New Construction EDGE Agreement that does not exceed
50% of the Incremental Income Tax attributable to New
Construction EDGE Employees at the Applicant's project;
however, if the New Construction EDGE Project is located in an
underserved area, then the amount of the New Construction EDGE
Credit may not exceed 75% of the Incremental Income Tax
attributable to New Construction EDGE Employees at the
Applicant's New Construction EDGE Project.
"New Construction EDGE Employee" means a laborer or worker
who is employed by an Illinois contractor or subcontractor in
the actual construction work on the site of a New Construction
EDGE Project, pursuant to a New Construction EDGE Agreement.
"New Construction EDGE Incremental Income Tax" means the
total amount withheld during the taxable year from the
compensation of New Construction EDGE Employees.
"New Construction EDGE Project" means the building of a

SB0805 Engrossed - 5 - LRB103 03260 HLH 48266 b
Taxpayer's structure or building, or making improvements of
any kind to real property. "New Construction EDGE Project"
does not include the routine operation, routine repair, or
routine maintenance of existing structures, buildings, or real
property.
"New Employee" means:
(a) A Full-time Employee first employed by a Taxpayer
in the project that is the subject of an Agreement and who
is hired after the Taxpayer enters into the tax credit
Agreement.
(b) The term "New Employee" does not include:
(1) 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;
(2) 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; or
(3) 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, capital, or value of the Taxpayer.
(c) Notwithstanding paragraph (1) of subsection (b),

SB0805 Engrossed - 6 - LRB103 03260 HLH 48266 b
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:
(1) treated under the Agreement as a New Employee;
and
(2) promoted by the Taxpayer to another job.
(d) Notwithstanding subsection (a), the Department may
award Credit to an Applicant with respect to an employee
hired prior to the date of the Agreement if:
(1) the Applicant is in receipt of a letter from
the Department stating an intent to enter into a
credit Agreement;
(2) the letter described in paragraph (1) is
issued by the Department not later than 15 days after
the effective date of this Act; and
(3) the employee was hired after the date the
letter described in paragraph (1) was issued.
"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 5-65.
"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.

SB0805 Engrossed - 7 - LRB103 03260 HLH 48266 b
"Professional Employer Organization" (PEO) means an
employee leasing company, as defined in Section 206.1(A)(2) of
the Illinois Unemployment Insurance Act.
"Related Member" means a person that, with respect to the
Taxpayer during any portion of the taxable year, is any one of
the following:
(1) 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.
(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 value of the
Taxpayer.
(3) A corporation, and any party related to the
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 Taxpayer
owns directly, indirectly, beneficially, or constructively
at least 50% of the value of the corporation's outstanding
stock.

SB0805 Engrossed - 8 - LRB103 03260 HLH 48266 b
(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
value of the Taxpayer.
(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, 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.
"Startup taxpayer" means, for Agreements that are executed
before the effective date of this amendatory Act of the 103rd
General Assembly, a corporation, partnership, or other entity
incorporated or organized no more than 5 years before the
filing of an application for an Agreement that has never had
any Illinois income tax liability, excluding any Illinois
income tax liability of a Related Member which shall not be
attributed to the startup taxpayer. "Startup taxpayer" means,
for Agreements that are executed on or after the effective
date of this amendatory Act of the 103rd General Assembly, a
corporation, partnership, or other entity incorporated or
organized no more than 10 years before the filing of an

SB0805 Engrossed - 9 - LRB103 03260 HLH 48266 b
application for an Agreement that has never had any Illinois
income tax liability, excluding any Illinois income tax
liability of a Related Member which shall not be attributed to
the startup taxpayer.
"Taxpayer" means an individual, corporation, partnership,
or other entity that has any Illinois Income Tax liability.
Until July 1, 2022, "underserved area" means a geographic
area that meets one or more of the following conditions:
(1) the area has a poverty rate of at least 20%
according to the latest federal decennial census;
(2) 75% or more of the children in the area
participate in the federal free lunch program according to
reported statistics from the State Board of Education;
(3) at least 20% of the households in the area receive
assistance under the Supplemental Nutrition Assistance
Program (SNAP); or
(4) the area has an average unemployment rate, as
determined by the Illinois Department of Employment
Security, that is more than 120% of the national
unemployment average, as determined by the U.S. Department
of Labor, for a period of at least 2 consecutive calendar
years preceding the date of the application.
On and after July 1, 2022, "underserved area" means a
geographic area that meets one or more of the following
conditions:
(1) the area has a poverty rate of at least 20%

SB0805 Engrossed - 10 - LRB103 03260 HLH 48266 b
according to the latest American Community Survey;
(2) 35% or more of the families with children in the
area are living below 130% of the poverty line, according
to the latest American Community Survey;
(3) at least 20% of the households in the area receive
assistance under the Supplemental Nutrition Assistance
Program (SNAP); or
(4) the area has an average unemployment rate, as
determined by the Illinois Department of Employment
Security, that is more than 120% of the national
unemployment average, as determined by the U.S. Department
of Labor, for a period of at least 2 consecutive calendar
years preceding the date of the application.
(Source: P.A. 101-9, eff. 6-5-19; 102-330, eff. 1-1-22;
102-700, eff. 4-19-22; 102-1125, eff. 2-3-23.)
(35 ILCS 10/5-15)
Sec. 5-15. Tax Credit Awards. Subject to the conditions
set forth in this Act, a Taxpayer is entitled to a Credit
against or, as described in subsection (g) of this Section, a
payment towards taxes imposed pursuant to subsections (a) and
(b) of Section 201 of the Illinois Income Tax Act that may be
imposed on the Taxpayer for a taxable year beginning on or
after January 1, 1999, if the Taxpayer is awarded a Credit by
the Department under this Act for that taxable year.
(a) The Department shall make Credit awards under this Act

SB0805 Engrossed - 11 - LRB103 03260 HLH 48266 b
to foster job creation and retention in Illinois.
(b) A person that proposes a project to create new jobs in
Illinois must enter into an Agreement with the Department for
the Credit under this Act.
(c) The Credit shall be claimed for the taxable years
specified in the Agreement.
(d) The Credit shall not exceed the Incremental Income Tax
attributable to the project that is the subject of the
Agreement.
(e) Nothing herein shall prohibit a Tax Credit Award to an
Applicant that uses a PEO if all other award criteria are
satisfied.
(f) In lieu of the Credit allowed under this Act against
the taxes imposed pursuant to subsections (a) and (b) of
Section 201 of the Illinois Income Tax Act for any taxable year
ending on or after December 31, 2009, for Taxpayers that
entered into Agreements prior to January 1, 2015 and otherwise
meet the criteria set forth in this subsection (f), the
Taxpayer may elect to claim the Credit against its obligation
to pay over withholding under Section 704A of the Illinois
Income Tax Act.
(1) The election under this subsection (f) may be made
only by a Taxpayer that (i) is primarily engaged in one of
the following business activities: water purification and
treatment, motor vehicle metal stamping, automobile
manufacturing, automobile and light duty motor vehicle

SB0805 Engrossed - 12 - LRB103 03260 HLH 48266 b
manufacturing, motor vehicle manufacturing, light truck
and utility vehicle manufacturing, heavy duty truck
manufacturing, motor vehicle body manufacturing, cable
television infrastructure design or manufacturing, or
wireless telecommunication or computing terminal device
design or manufacturing for use on public networks and
(ii) meets the following criteria:
(A) the Taxpayer (i) had an Illinois net loss or an
Illinois net loss deduction under Section 207 of the
Illinois Income Tax Act for the taxable year in which
the Credit is awarded, (ii) employed a minimum of
1,000 full-time employees in this State during the
taxable year in which the Credit is awarded, (iii) has
an Agreement under this Act on December 14, 2009 (the
effective date of Public Act 96-834), and (iv) is in
compliance with all provisions of that Agreement;
(B) the Taxpayer (i) had an Illinois net loss or an
Illinois net loss deduction under Section 207 of the
Illinois Income Tax Act for the taxable year in which
the Credit is awarded, (ii) employed a minimum of
1,000 full-time employees in this State during the
taxable year in which the Credit is awarded, and (iii)
has applied for an Agreement within 365 days after
December 14, 2009 (the effective date of Public Act
96-834);
(C) the Taxpayer (i) had an Illinois net operating

SB0805 Engrossed - 13 - LRB103 03260 HLH 48266 b
loss carryforward under Section 207 of the Illinois
Income Tax Act in a taxable year ending during
calendar year 2008, (ii) has applied for an Agreement
within 150 days after the effective date of this
amendatory Act of the 96th General Assembly, (iii)
creates at least 400 new jobs in Illinois, (iv)
retains at least 2,000 jobs in Illinois that would
have been at risk of relocation out of Illinois over a
10-year period, and (v) makes a capital investment of
at least $75,000,000;
(D) the Taxpayer (i) had an Illinois net operating
loss carryforward under Section 207 of the Illinois
Income Tax Act in a taxable year ending during
calendar year 2009, (ii) has applied for an Agreement
within 150 days after the effective date of this
amendatory Act of the 96th General Assembly, (iii)
creates at least 150 new jobs, (iv) retains at least
1,000 jobs in Illinois that would have been at risk of
relocation out of Illinois over a 10-year period, and
(v) makes a capital investment of at least
$57,000,000; or
(E) the Taxpayer (i) employed at least 2,500
full-time employees in the State during the year in
which the Credit is awarded, (ii) commits to make at
least $500,000,000 in combined capital improvements
and project costs under the Agreement, (iii) applies

SB0805 Engrossed - 14 - LRB103 03260 HLH 48266 b
for an Agreement between January 1, 2011 and June 30,
2011, (iv) executes an Agreement for the Credit during
calendar year 2011, and (v) was incorporated no more
than 5 years before the filing of an application for an
Agreement.
(1.5) The election under this subsection (f) may also
be made by a Taxpayer for any Credit awarded pursuant to an
agreement that was executed between January 1, 2011 and
June 30, 2011, if the Taxpayer (i) is primarily engaged in
the manufacture of inner tubes or tires, or both, from
natural and synthetic rubber, (ii) employs a minimum of
2,400 full-time employees in Illinois at the time of
application, (iii) creates at least 350 full-time jobs and
retains at least 250 full-time jobs in Illinois that would
have been at risk of being created or retained outside of
Illinois, and (iv) makes a capital investment of at least
$200,000,000 at the project location.
(1.6) The election under this subsection (f) may also
be made by a Taxpayer for any Credit awarded pursuant to an
agreement that was executed within 150 days after the
effective date of this amendatory Act of the 97th General
Assembly, if the Taxpayer (i) is primarily engaged in the
operation of a discount department store, (ii) maintains
its corporate headquarters in Illinois, (iii) employs a
minimum of 4,250 full-time employees at its corporate
headquarters in Illinois at the time of application, (iv)

SB0805 Engrossed - 15 - LRB103 03260 HLH 48266 b
retains at least 4,250 full-time jobs in Illinois that
would have been at risk of being relocated outside of
Illinois, (v) had a minimum of $40,000,000,000 in total
revenue in 2010, and (vi) makes a capital investment of at
least $300,000,000 at the project location.
(1.7) Notwithstanding any other provision of law, the
election under this subsection (f) may also be made by a
Taxpayer for any Credit awarded pursuant to an agreement
that was executed or applied for on or after July 1, 2011
and on or before March 31, 2012, if the Taxpayer is
primarily engaged in the manufacture of original and
aftermarket filtration parts and products for automobiles,
motor vehicles, light duty motor vehicles, light trucks
and utility vehicles, and heavy duty trucks, (ii) employs
a minimum of 1,000 full-time employees in Illinois at the
time of application, (iii) creates at least 250 full-time
jobs in Illinois, (iv) relocates its corporate
headquarters to Illinois from another state, and (v) makes
a capital investment of at least $4,000,000 at the project
location.
(1.8) Notwithstanding any other provision of law, the
election under this subsection (f) may also be made by a
startup taxpayer for any Credit awarded pursuant to an
Agreement that was executed or applied for on or after the
effective date of this amendatory Act of the 102nd General
Assembly, if the startup taxpayer, without considering any

SB0805 Engrossed - 16 - LRB103 03260 HLH 48266 b
Related Member or other investor, (i) has never had any
Illinois income tax liability and (ii) was incorporated no
more than 5 years before the filing of an application for
an Agreement. Any such election under this paragraph (1.8)
shall be effective unless and until such startup taxpayer
has any Illinois income tax liability. This election under
this paragraph (1.8) shall automatically terminate when
the startup taxpayer has any Illinois income tax liability
at the end of any taxable year during the term of the
Agreement. Thereafter, the startup taxpayer may receive a
Credit, taking into account any benefits previously
enjoyed or received by way of the election under this
paragraph (1.8), so long as the startup taxpayer remains
in compliance with the terms and conditions of the
Agreement.
(2) An election under this subsection shall allow the
credit to be taken against payments otherwise due under
Section 704A of the Illinois Income Tax Act during the
first calendar quarter year beginning after the end of the
taxable quarter year in which the credit is awarded under
this Act.
(3) The election shall be made in the form and manner
required by the Illinois Department of Revenue and, once
made, shall be irrevocable.
(4) If a Taxpayer who meets the requirements of
subparagraph (A) of paragraph (1) of this subsection (f)

SB0805 Engrossed - 17 - LRB103 03260 HLH 48266 b
elects to claim the Credit against its withholdings as
provided in this subsection (f), then, on and after the
date of the election, the terms of the Agreement between
the Taxpayer and the Department may not be further amended
during the term of the Agreement.
(g) A pass-through entity that has been awarded a credit
under this Act, its shareholders, or its partners may treat
some or all of the credit awarded pursuant to this Act as a tax
payment for purposes of the Illinois Income Tax Act. The term
"tax payment" means a payment as described in Article 6 or
Article 8 of the Illinois Income Tax Act or a composite payment
made by a pass-through entity on behalf of any of its
shareholders or partners to satisfy such shareholders' or
partners' taxes imposed pursuant to subsections (a) and (b) of
Section 201 of the Illinois Income Tax Act. In no event shall
the amount of the award credited pursuant to this Act exceed
the Illinois income tax liability of the pass-through entity
or its shareholders or partners for the taxable year.
(Source: P.A. 102-700, eff. 4-19-22.)