Illinois Administrative Code › Title 14 - COMMERCE › Part 120 - MANUFACTURING ILLINOIS CHIPS FOR REAL OPPORTUNITY (MICRO) ACT › Subpart A - ADMINISTRATIVE REQUIREMENTS › Section 120.20 - Definitions

Current through Register Vol. 48, No. 28, July 12, 2024
The following definitions are applicable to this Part.
"Act" means the Manufacturing Illinois Chips for Real
				  Opportunity (MICRO) Act [35 ILCS 45/110].
"Agreement" means the agreement between a taxpayer
				  and the Department under the provisions of
the
				  Act
.
"Applicant" means a taxpayer that:
operates a business in Illinois as a semiconductor
				  manufacturer, a microchip manufacturer, or a manufacturer of semiconductor or
				  microchip component parts; or
is planning to locate a business within the State of
				  Illinois as a semiconductor manufacturer, a microchip manufacturer, or a
				  manufacturer of semiconductor or microchip component parts.
"Applicant" does not include a taxpayer who closes or
				  substantially reduces by more than 50% operations 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 location in the State. 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 or county 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.
"Capital improvements" means the purchase,
				  renovation, rehabilitation, or construction of permanent tangible land,
				  buildings, structures, equipment, and furnishings in an approved project sited
				  in Illinois and expenditures for goods or services that are normally
				  capitalized, including organizational costs and research and development costs
				  incurred in Illinois. For land, buildings, structures, and equipment that are
				  leased, the lease must equal or exceed the term of the agreement, and the cost
				  of the property shall be determined from the present value, using the corporate
				  interest rate prevailing at the time of the application, of the lease
				  payments.
"Compensation" means compensation as defined in Section
				  1501(a)(3) of the Income Tax Act
.
[35 ILCS
				  5/1501(a)(3) ]
"Credit" or "MICRO credit" means a credit agreed to
				  between the Department and applicant under
the
				  Act
.
"Department" means the Department of Commerce and
				  Economic Opportunity.
"Director" means the Director of Commerce and
				  Economic Opportunity.
"Energy Transition Area" means a county with less
				  than 100,000 people or a municipality that contains one or more of the
				  following:
a fossil fuel plant that was retired from service or
				  has significant reduced service within 6 years before the time of the
				  application or will be retired or have service significantly reduced within 6
				  years following the time of the application; or
a coal mine that was closed or had operations
				  significantly reduced within 6 years before the time of the application or is
				  anticipated to be closed or have operations significantly reduced within 6
				  years following the time of the application.
"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.
Annually scheduled periods for inventory or
				  repairs, vacations, holidays and paid time for sick leave, vacation or other
				  leave shall be included in this computation of 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.
"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
[35 ILCS 5/70]
arising from employment at a project that
				  is the subject of an agreement.
"Institution of higher education" or "institution"
				  means any accredited public or private university, college, community college,
				  business, technical, or vocational school, or other accredited educational
				  institution offering degrees and instruction beyond the secondary school
				  level.
"Local workforce investment area" means a single county or
				  multiple counties designated by the Governor, which allows for the receipt of
				  an allotment of funds under Sections 127(b) or 132(b) of the Workforce
				  Innovation and Opportunity Act, (P.L. 113 through 128 (2014)) (WIOA), with
				  considerations consisting of the extent to which the areas:
are consistent with labor market areas in the State;
are consistent with regional economic development areas in
				  the State; and
have available the federal and non-federal resources
				  necessary to effectively administer activities under subtitle B and other
				  applicable provisions of WIOA,
including whether the areas have the appropriate education
				  and training providers, such as institutions of higher education and area
				  career and technical education schools.
"MICRO construction jobs credit" means a credit
				  agreed to between the Department and the applicant under
the Act
that is based on the incremental income tax attributable to
				  construction wages paid in connection with construction of the project
				  facilities.
"MICRO credit" means a credit agreed to between the
				  Department and the applicant under
the Act
that is based on
				  the incremental income tax attributable to new employees and, if applicable,
				  retained employees, and on training costs for such employees at the applicant's
				  project.
"Microchip" means a wafer of semiconducting material
				  that is less than 15 millimeters long and less than 5 millimeters wide and is
				  used to make an integrated circuit.
"Microchip manufacturer" means a new or existing
				  manufacturer that is focused on reequipping, expanding, or establishing a
				  manufacturing facility in Illinois that produces microchips or key components
				  that directly support the functions of microchips.
"Minority person" means a minority person as defined
				  in the Business Enterprise for Minorities, Women, and Persons with Disabilities
				  Act
[30 ILCS 575/0.01
				  ]
.
"New employee" means a newly-hired full-time employee
				  employed to work at the project site and whose work is directly related to the
				  project.
The term "New Employee" does not include:
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;
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;
any individual who has a direct or an indirect ownership
				  interest of at least 5% in the profits, equity, capital, or value of the
				  taxpayer or 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, equity, capital, or
				  value of the taxpayer.
"Noncompliance date" means, in the case of a taxpayer
				  that is not complying with the requirements of the agreement or the provisions
				  of
the Act
, the day following the last date upon which the
				  taxpayer was in compliance with the requirements of the agreement and the
				  provisions of
the Act
, as determined by the
				  Director.
"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
[35 ILCS 5/205
				  ]
.
"Placed in service" means the state or condition of
				  readiness, availability for a specifically assigned function, and the facility
				  is constructed and ready to conduct its facility operations to manufacture
				  goods.
"Professional employer organization" or "PEO" means
				  an employee leasing company
that is an individual or entity
				  contracting with a client to supply or assume responsibility for personnel
				  management of one or more workers to perform services for the client on an
				  on-going basis rather than under a temporary help arrangement
, as
				  defined in Section 206.1 of the Illinois Unemployment Insurance
				  Act.
"Program" means the Manufacturing Illinois Chips for
				  Real Opportunity (MICRO) program established in
the
				  Act
.
"Project" means a for-profit economic development
				  activity for the manufacture of semiconductors and microchips.
"Project costs" includes cost of the project incurred or to
				  be incurred by the taxpayer including: capital investment, including, but not
				  limited to, equipment, buildings, or land; infrastructure development; debt
				  service, except refinancing of current debt; research and development; job
				  training and education; lease costs or relocation costs, but excludes the value
				  of State incentives, including discretionary tax credits, discretionary job
				  training grants, or the interest savings of below market rate loans.
"Related member" means a person that, with respect to
				  the taxpayer during any portion of the taxable year, is any one of the
				  following:
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.
Partnership, estate, 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.
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 Taxpayer owns directly, indirectly, beneficially, or constructively at
				  least 50% of the value of the corporation's outstanding stock.
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.
A person to or from whom there is an 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.
"Retained employee" means a full-time employee
				  employed by the taxpayer prior to the term of the Agreement who continues to be
				  employed during the term of the agreement whose job duties are directly and
				  substantially related to the project. For purposes of this definition,
				  "directly and substantially related to the project" means at least two-thirds
				  of the employee's job duties must be directly related to the project and the
				  employee must devote at least two-thirds of his or her time to the project. The
				  term "retained employee" does not include any individual who has a direct or an
				  indirect ownership interest of at least 5% in the profits, equity, capital, or
				  value of the taxpayer or 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 indirect ownership of at least 5% in the profits, equity, capital,
				  or value of the taxpayer.
"Semiconductor" means any class of crystalline solids
				  intermediate in electrical conductivity between a conductor and an
				  insulator.
"Semiconductor manufacturer" means a new or existing
				  manufacturer that is focused on reequipping, expanding, or establishing a
				  manufacturing facility in Illinois that produces semiconductors or key
				  components that directly support the functions of
				  semiconductors.
"Statewide baseline" means the total number of
				  full-time employees of the applicant and any related member employed by such
				  entities at the time of application for incentives under
the
				  Act
.
"Taxpayer" means an individual, corporation,
				  partnership, or other entity that has a legal obligation to pay Illinois income
				  taxes and file an Illinois income tax return.
"Training costs" means costs incurred to upgrade the
				  technological skills of full-time employees in Illinois and includes:
				  curriculum development; training materials (including scrap product costs);
				  trainee domestic travel expenses; instructor costs (including wages, fringe
				  benefits, tuition and domestic travel expenses); rent, purchase or lease of
				  training equipment; and other usual and customary training costs. "Training
				  costs" do not include costs associated with travel outside the United States
				  (unless the taxpayer receives prior written approval for the travel by the
				  Director based on a showing of substantial need or other proof the training is
				  not reasonably available within the United States), wages and fringe benefits
				  of employees during periods of training, or administrative cost related to
				  full-time employees of the taxpayer.
"Underserved area" means any geographic areas as
				  defined in Section 5-5 of the Economic Development for a Growing Economy Tax
				  Credit Act
[35 ILCS 10/5-5
				  ]
.