Illinois Administrative Code › Title 14 - COMMERCE › Part 527 - ECONOMIC DEVELOPMENT FOR A GROWING ECONOMY PROGRAM (EDGE) › Section 527.20 - Definitions

Current through Register Vol. 48, No. 28, July 12, 2024
The following definitions are applicable to this Part.
"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.
"Act" means the Economic Development for a Growing Economy Tax
				Credit Act [35 ILCS 10 ].
"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.
"Agreement" means the Agreement between a Taxpayer and the
				Department under the provisions of Section 5-50 of
the
Act.
				[35 ILCS
				10/5-5 ]
"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 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 purposes 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.
[35 ILCS
				10/5-5 ]
"Blue Collar Jobs Act" means the Act created by Article 20 of
				P.A. 101-9 (portions related to this Part codified at
				35 ILCS
				10/5-5, 5 -51 and 5-56) that creates the Enterprise
				Zone construction jobs credit, the High Impact Business construction jobs
				credit, the River Edge construction jobs credit, and the New Construction EDGE
				credit.
"Business Location Efficiency Incentive" means the incentive
				created by the Business Location Efficiency Incentive Act [35 ILCS 11 ].
"Capital improvements" shall include the purchase, renovation,
				rehabilitation, or construction of permanent tangible land, buildings,
				structures, equipment and furnishings in an approved project sited in Illinois
				and in 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 Tax Credit 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.
"Credit" means the amount agreed to between the
				Department and Applicant under the Act, but not to exceed the lesser
				of:
the sum of:
50% of the Incremental Income Tax attributable to New
				Employees at the Applicant's project; and
10% of the training costs of New Employees;
				or
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:
the sum of:
75% of the Incremental Income Tax attributable to New
				Employees at the Applicant's project and
10% of the training costs of New Employees;
				or
100% of the Incremental Income Tax attributable to New
				Employees at the Applicant's project.
If an 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; provided that,
				in order to receive the increase for Retained Employees, the Applicant must
				provide the additional evidence required under Section 5-25
(b)(3).
				[35 ILCS
				10/5-5 ]
"Department" means the Illinois Department of Commerce
				and Economic Opportunity
. [35 ILCS
				10/5-5 ]
"Director" means the Director of the Illinois
				Department of Commerce and Economic Opportunity
. [35 ILCS
				10/5-5 ]
"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
				assisted housing program that can be supplemented by State or federal grants or
				shuttle services between the place of employment and existing transit stops or
				other reasonably accessible places.
"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.
"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.
[35
				ILCS 10/5-5 ] 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 or who renders any other standard
				of service generally accepted by industry custom or practice as full-time
				employment to the Applicant.
[35 ILCS
				10/5-5 ] For example, an employee who works 25 hours
				per week is considered the industry standard for full-time in the package
				delivery industry and an employee who is employed for a least 35 hours per week
				during the historical seasonal production is considered the industry standard
				for full-time in the candy manufacturing industry.
"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 ]
arising from employment at a project that is
				the subject of an Agreement
. [35 ILCS
				10/5-5 ]
"Labor Surplus Area" or "LSA" must have an average unemployment
				rate at least 20% above the average rate for all states (plus the District of
				Columbia and Puerto Rico) during the previous two calendar years. However, the
				20% ratio is disregarded:
when this 2-year average for all states is 8.3 % or above, an
				average unemployment rate of 10% or more will qualify an area; and
when the all-states' average is 5.0 % or less, an area will
				qualify with a 6.0 % average.
The U.S. Department of Labor issues the labor surplus area
				listing on a fiscal year basis. The listing becomes effective each October 1
				and remains in effect through the following September 30, but may be updated at
				any time during the fiscal year based on exceptional circumstance petitions.
				LSAs are classified on the basis of civil jurisdictions (cities with a
				population of at least 25,000 and all counties). LSAs are authorized by Public
				Law 96-302 and 20 CFR 654.
"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 section 127(b) or 132(b) of the Workforce
				Innovation and Opportunity Act ( PL 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.
"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 of the Business Location Efficiency Incentive Act
[35
				ILCS 11 ]
and follows that Act, and that describes the existence of
				affordable workforce housing or accessible and affordable mass transit or its
				equivalent.
[35 ILCS
				11/5 ]
"New Construction EDGE Agreement" means the Agreement
				between a Taxpayer and the Department under Section 5-51 of the Act.
[35 ILCS
				10/5-5 ]
"New Construction EDGE Credit" means an amount agreed
				to between the Department and the Applicant under the 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.
[35 ILCS
				10/5-5 ]
"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.
[35 ILCS
				10/5-5 ]
"New Construction EDGE Incremental Income Tax" means
				the total amount withheld during the taxable year from the compensation of New
				Construction EDGE Employees.
[35 ILCS
				10/5-5 ]
"New Construction EDGE Project" means the building of a
				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.
[35 ILCS
				10/5-5 ]
"New Employee" means 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 and who
				continues to be employed by the Taxpayer on the last day of the taxable year
				for which the Taxpayer seeks a Credit under the Act.
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;
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; or
an employee of the Taxpayer who was previously employed in
				Illinois by the Taxpayer and whose employment was shifted to the project after
				the Taxpayer entered into the tax credit Agreement.
Notwithstanding
the first indented paragraph
				under the employees that are not included in the term "New Employees", 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:
treated under the Agreement as a New Employee;
				and
promoted by the Taxpayer to another job.
[35 ILCS
				10/5-5 ]
Notwithstanding
the first paragraph of this
				definition,
the Department may award a Credit to an Applicant with
				respect to an employee hired prior to the date of the Agreement
				if:
the Applicant is in receipt of a letter from the
				Department stating an intent to enter into a credit Agreement;
the letter described in
the first indented
				paragraph under the employees that are not included in the term "New Employees"
is issued by the Department not later than 15 days after
the
effective date of the Act; and
the employee was hired after the date the letter
				described in
the first indented paragraph under the employees that are
				not included in the term "New Employees"
was issued.
An employee shall be considered a new employee under the
				Agreement if the employee fills a job vacancy that had been continuously vacant
				for the 184 day period immediately preceding the date of the Agreement. A job
				vacancy whose incumbent is on approved leave, is locked out or is on strike is
				not a vacancy.
"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, pursuant to Section
				5-65
of the Act
.
[35 ILCS
				10/5-5 ]
"Pass Through Entity" means an entity that is exempt
				from the tax under Section 205(b) or (c) of the Illinois Income Tax
				Act.
[35 ILCS
				10/5-5 ]
"Placed in service" means the state or condition of readiness
				and availability for a specifically assigned function.
"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(A)(2) of the Illinois Unemployment Insurance Act
[820 ILCS 405
				]. [35 ILCS
				10/5-5 ]
"Professional services" means a taxpayer engaged in the
				practice of law or medicine.
"Project" means a for-profit economic development activity or
				activities at a single site, or of one or more taxpayers at multiple sites if
				the economic activities are vertically integrated.
"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. [35 ILCS
				10/5-30 ]
"Related Member" means a person that, with respect to
				the Taxpayer during an 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 (26 USC)) own directly, indirectly, beneficially, or
				constructively, in the aggregate, at least 50% of the value of the Taxpayer's
				outstanding stock.
A partnership, estate, or trust of 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,
equity,
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 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.
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,
equity,
capital, stock, or value of the Taxpayer
.
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.
[30 ILCS 10/5-5 ]
"Retained Employee" means a Full-Time Employee employed by a
				Taxpayer 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 the employee's 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 direct or indirect ownership interest of at least 5% in the
				profits, equity, capital, or value of the taxpayer.
"Taxpayer" means an individual, corporation,
				partnership, or other entity that has any Illinois Income Tax
				liability.
[35 ILCS
				10/5-5 ]
"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 a geographic area that meets
				one or more of the following conditions:
the area has a poverty rate of at least 20% according
				to the latest federal decennial census
, the most recent American
				Community Survey released by the U.S. Census Bureau, or other appropriate data
				source produced by the U.S. Census Bureau;
75% or more of the children in the area
are
				eligible to
participate in the federal free lunch
or
				reduced-price meals
program according to reported statistics from the
				State Board of Education;
at least 20% of the households in the area receive
				assistance under the Supplemental Nutrition Assistance Program (SNAP)
according to data from the U.S. Census Bureau
; or
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 determining by the U.S. Department of Labor,
				for a period of at least two consecutive calendar years preceding the date of
				the application. [35 ILCS
				10/5-5 ]