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ENTERPRISE ZONE PROGRAM MODIFICATIONS
J. Craig CoilPresident - Illinois Enterprise Zone Association
CEO/President – EDC of Decatur & Macon County
IEZA Fall ConferenceSpringfield, Illinois
April 25, 2013
ISSUES SINCE NOVEMEBER
NEW IDOR REPORTING PROCESSES DCEO MISSED THE APPLICATION
DEADLINE Friday’s Public Comment Period on JCAR
Rules is your chance to speak out. New proposed application timelines
per JCAR filing. New proposed rule on adding
territory
ISSUES SINCE NOVEMEBER
One of the major concerns with these proposed rules is the proposed one-year delay in the application deadline for enterprise zones to December 31, 2014 (Section 520.230(b)). SB 3616 contained a strict negotiated timeline that required applications to be available by April 1, 2013 with a deadline of December 31, 2013. Changes to the deadlines established in the original legislation should be addressed through legislation.
ISSUES SINCE NOVEMEBER
Another significant concern is the administrative rule (Section 520.310 (1)) requiring any addition to an enterprise zone to meet three of ten tests. This was not the intent of the legislation that required the entire enterprise zone (not a simple addition) to meet three of ten criteria based on unemployment, poverty, business closings, vacancy, tax improvement plans, infrastructure, property values, and manufacturing skills. We adamantly oppose requiring an additional parcel of land to meet three requirements.
ISSUES SINCE NOVEMEBER
The enterprise zone legislation created enterprise zones for 25 years with a review at year 15. Enterprise zones would be evaluated and automatically receive the final 10 years of life if they continued to meet the requirements set forth in the Act. However, Section 520.315 (b)(4) requires an enterprise zone to make application for the final ten years that is not the intent or the language of the law. This section should be revised with Enterprise Zone Board reviewing the current zone and granting the ten year extension if their continue to meet the legal requirements.
ISSUES SINCE NOVEMEBER
MISCONCEPTION AMONG COMMUNITIES
This is not a renewal of your current Zone.
This is a new Zone designation process.
Key Elements
All zones expiring between 2013 and 2016 receive 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
Key Elements
MAPS
Each Zone Administrator shall post a copy of the boundaries of the Enterprise Zone on its official Internet website and shall provide an electronic copy to the Department. The Department shall post each copy of the boundaries of an Enterprise Zone that it receives from a Zone Administrator on its official Internet website.
Key Elements
ADMINISTRATION FEES
By April 1 of each year, each Zone Administrator shall file a copy of its fee schedule with the Department, and the Department shall review and approve the fee schedule. Zone Administrators shall charge no more than 0.5% of the cost of building materials of the project associated with the specific Enterprise Zone, with a maximum fee of no more than $50,000.
Key Elements
Sales Tax Exemption Certification Process Changes and Reporting Changes: Administrators vs. IDOR
Massive new reporting by companies/contractors and administrators. Companies: Quantify benefits by MAY for the
preceding year. Administrators: Specific company/contractor
tracking info by MAY for the preceding year.
Key Elements
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 15 years. Rivers Edge Zones transitioned to new
competitive Enterprise Zones as they expire in 20-25 years, resulting in 5 new Zones.
Qualifying Criteria
All or part of the local labor market area has had an annual average unemployment rate of at least 120% of the State's annual average unemployment rate for the most recent calendar year or the most recent fiscal year as reported by the Department of Employment Security. (50 points)
Qualifying Criteria
Designation will result in the development of substantial employment opportunities by creating or retaining a minimum aggregate of 1,000 full-time equivalent jobs due to an aggregate investment of $100,000,000 or more, and will help alleviate the effects of poverty and unemployment within the local labor market area. (50 points)
Qualifying Criteria
All or part of the local labor market area has a poverty rate of at least 20% according to the latest federal decennial census, 50% or more of children in the local labor market area participate in the federal free lunch program according to reported statistics from the State Board of Education, or 20% or more households in the local labor market area receive food stamps according to the latest federal decennial census. (40 points)
Qualifying Criteria
An abandoned coal mine or a brownfield (as defined in Section 58.2 of the Environmental Protection Act) is located in the proposed zone area, or all or a portion of the proposed zone was declared a federal disaster area in the 3 years preceding the date of application. (30 points)
Qualifying Criteria
The local labor market area contains a presence of large employers that have downsized over the years, the labor market area has experienced plant closures in the 5 years prior to the date of application affecting more than 50 workers, or the local labor market area has experienced State or federal facility closures in the 5 years prior to the date of application affecting more than 50 workers. (50 points)
Qualifying Criteria
Based on data from Multiple Listing Service information or other suitable sources, the local labor market area contains a high floor vacancy rate of industrial or commercial properties, vacant or demolished commercial and industrial structures are prevalent in the local labor market area, or industrial structures in the local labor market area are not used because of age, deterioration, relocation of the former occupants, or cessation of operation. (40 points)
Qualifying Criteria
The applicant demonstrates a substantial plan for using the designation to improve the state and local government tax base. (30 points)
Significant public infrastructure is present in the local labor market area in addition to a plan for infrastructure development and improvement. (50 points)
Qualifying Criteria
High schools or community colleges located within the local labor market area are engaged in ACT Work Keys, Manufacturing Skills Standard Certification, or other industry-based credentials that prepare students for careers. (40 points)
Qualifying Criteria
The change in equalized assessed valuation of industrial and/or commercial properties in the 5 years prior to the date of application is equal to or less than 50% of the State average change in equalized assessed valuation for industrial and/or commercial properties, as applicable, for the same period of time. (40 points)
Critical Timelines
DCEO to make new application available by 3/31/2013.
Applications due to DCEO by late 2013 or early 2014 (subject to JCAR rulemaking). 69 existing zones impacted initially.
DCEO forwards application rankings/recommendations to EZone Advisory Board. Directors of DCEO, Revenue and three Gov.
appointments. (Cook, Collar and Downstate)
Critical Timelines
DCEO and Advisory Board Review and awards in 2016 (estimated).
Timeline allows for shutdown period for non-renewed zones and startup and reconfiguration for renewed and new Enterprise Zones for 2016.
Critical Timelines After 2015
Communities seeking renewal or new designation apply to DCEO by December of each year.
DCEO Reviews sent to Advisory Board by September of each year for applications received through December of previous year.
Advisory Board designation recommendations by December.
J. Craig CoilPresident – Illinois Enterprise Zone Assn.CEO/President – EDC of Decatur & Macon
County101 South Main – Suite LL 5
Decatur, Illinois 62523217-422-9520
