J. Craig CoilPresident - Illinois Enterprise Zone AssociationCEO/President – EDC of Decatur & Macon CountyIEZA Fall ConferenceSpringfield, IllinoisApril 25, 2013
NEW IDOR REPORTING PROCESSES DCEO MISSED THE APPLICATIONDEADLINE Friday’s Public Comment Period on JCAR Rules isyour chance to speak out. New proposed application timelines per JCARfiling. New proposed rule on adding territory
One of the major concerns with these proposedrules is the proposed one-year delay in theapplication deadline for enterprise zones toDecember 31, 2014 (Section 520.230(b)). SB 3616contained a strict negotiated timeline that requiredapplications to be available by April 1, 2013 with adeadline of December 31, 2013. Changes to thedeadlines established in the original legislationshould be addressed through legislation.
Another significant concern is the administrativerule (Section 520.310 (1)) requiring any addition toan enterprise zone to meet three of ten tests. Thiswas not the intent of the legislation that requiredthe entire enterprise zone (not a simple addition) tomeet three of ten criteria based onunemployment, poverty, businessclosings, vacancy, tax improvementplans, infrastructure, property values, andmanufacturing skills. We adamantly opposerequiring an additional parcel of land to meet threerequirements.
The enterprise zone legislation created enterprisezones for 25 years with a review at year 15.Enterprise zones would be evaluated andautomatically receive the final 10 years of life ifthey continued to meet the requirements set forthin the Act. However, Section 520.315 (b)(4)requires an enterprise zone to make applicationfor the final ten years that is not the intent or thelanguage of the law. This section should berevised with Enterprise Zone Board reviewingthe current zone and granting the ten yearextension if their continue to meet the legalrequirements.
MISCONCEPTION AMONGCOMMUNITIES This is not a renewal of your current Zone. This is a new Zone designation process.
All zones expiring between 2013 and 2016receive automatic extension until 2016. Impact on local abatement resolutions/ordinances. Incentives Eliminated $500 Job Tax Credit Dividend Income Deduction Interest Income Deduction for Financial Institutions
MAPS Each Zone Administrator shall post a copy ofthe boundaries of the Enterprise Zone on itsofficial Internet website and shall provide anelectronic copy to the Department. TheDepartment shall post each copy of theboundaries of an Enterprise Zone that itreceives from a Zone Administrator on itsofficial Internet website.
ADMINISTRATION FEES By April 1 of each year, each ZoneAdministrator shall file a copy of its feeschedule with the Department, and theDepartment shall review and approve the feeschedule. Zone Administrators shall charge nomore than 0.5% of the cost of buildingmaterials of the project associated with thespecific Enterprise Zone, with a maximum feeof no more than $50,000.
Sales Tax Exemption Certification ProcessChanges and Reporting Changes:Administrators vs. IDOR Massive new reporting bycompanies/contractors and administrators. Companies: Quantify benefits by MAY for thepreceding year. Administrators: Specific company/contractortracking info by MAY for the preceding year.
Local administration fees capped at $50,000. New Renewal Process/Qualifying Criteria. No preference for existing zones. 25 year extension from 2016 with review at 15years. Rivers Edge Zones transitioned to newcompetitive Enterprise Zones as they expire in20-25 years, resulting in 5 new Zones.
All or part of the local labor market area hashad an annual average unemployment rate ofat least 120% of the States annual averageunemployment rate for the most recentcalendar year or the most recent fiscal year asreported by the Department of EmploymentSecurity. (50 points)
Designation will result in the development ofsubstantial employment opportunities bycreating or retaining a minimum aggregate of1,000 full-time equivalent jobs due to anaggregate investment of $100,000,000 ormore, and will help alleviate the effects ofpoverty and unemployment within the locallabor market area. (50 points)
All or part of the local labor market area has apoverty rate of at least 20% according to thelatest federal decennial census, 50% or more ofchildren in the local labor market areaparticipate in the federal free lunch programaccording to reported statistics from the StateBoard of Education, or 20% or morehouseholds in the local labor market areareceive food stamps according to the latestfederal decennial census. (40 points)
An abandoned coal mine or a brownfield (asdefined in Section 58.2 of the EnvironmentalProtection Act) is located in the proposed zonearea, or all or a portion of the proposed zonewas declared a federal disaster area in the 3years preceding the date of application. (30 points)
The local labor market area contains a presenceof large employers that have downsized overthe years, the labor market area hasexperienced plant closures in the 5 years priorto the date of application affecting more than50 workers, or the local labor market area hasexperienced State or federal facility closures inthe 5 years prior to the date of applicationaffecting more than 50 workers. (50 points)
Based on data from Multiple Listing Serviceinformation or other suitable sources, the locallabor market area contains a high floor vacancyrate of industrial or commercialproperties, vacant or demolished commercialand industrial structures are prevalent in thelocal labor market area, or industrial structuresin the local labor market area are not usedbecause of age, deterioration, relocation of theformer occupants, or cessation of operation. (40 points)
The applicant demonstrates a substantial planfor using the designation to improve the stateand local government tax base. (30 points) Significant public infrastructure is present inthe local labor market area in addition to a planfor infrastructure development andimprovement. (50 points)
High schools or community colleges locatedwithin the local labor market area are engagedin ACT Work Keys, Manufacturing SkillsStandard Certification, or other industry-basedcredentials that prepare students for careers. (40 points)
The change in equalized assessed valuation ofindustrial and/or commercial properties in the5 years prior to the date of application is equalto or less than 50% of the State average changein equalized assessed valuation for industrialand/or commercial properties, asapplicable, for the same period of time. (40 points)
DCEO to make new application available by3/31/2013. Applications due to DCEO by late 2013 orearly 2014 (subject to JCAR rulemaking). 69existing zones impacted initially. DCEO forwards applicationrankings/recommendations to EZoneAdvisory Board. Directors of DCEO, Revenue and three Gov.appointments. (Cook, Collar and Downstate)
DCEO and Advisory Board Review andawards in 2016 (estimated). Timeline allows for shutdown period for non-renewed zones and startup and reconfigurationfor renewed and new Enterprise Zones for2016.
Communities seeking renewal or new designationapply to DCEO by December of each year. DCEO Reviews sent to Advisory Board bySeptember of each year for applications receivedthrough December of previous year. Advisory Board designation recommendations byDecember.
J. Craig CoilPresident – Illinois Enterprise Zone Assn.CEO/President – EDC of Decatur & Macon County101 South Main – Suite LL 5Decatur, Illinois email@example.com