Interoffice by mifei


                                                                                    April 29, 2010
To:        All Members of the Jobs Creation Task Force
From:      Representative Lou Lang, Chairman
           Representative Bill Mitchell, Spokesperson
Re:        Report of Illinois House of Representatives Bipartisan Jobs Creation Task Force


The House of Representatives BIPARTISAN JOBS CREATION TASK FORCE was convened by
Deputy Majority Leader Lou Lang with the goal of gathering and vetting ideas that would create
jobs in Illinois. Fifty-four state representatives, representing both caucuses, joined the task
force. To date, the task force has held meetings in Chicago, Decatur, Rockford, Naperville,
Palatine, and Springfield and has heard from more than 75 presenters. From the proposals
presented at the hearings, the task force will prepare legislation that establishes a more
favorable business climate in the State of Illinois and creates 21st century jobs in the wake of the
current recessionary economic conditions.
The task force has heard from industry and trade associations, chambers of commerce and
economic development agencies, professionals, academics, government agencies (including
the Governor’s Economic Development Council), corporations, and small business owners.
Some ideas presented before the task force can be found in proposals moving through the
legislative process. Examples are:
     House Bill 5917 (Phelps/Cullerton): Streamlines health department licensing for food
      industry workers;
     House Bill 5191(Fortner/Burzynski): Requires each agency to examine the economic impact
      each new rule or amendment would have on small businesses before filing the proposal with
      JCAR. (2nd Reading, Senate).

     House Bill 6359 (Sente/Viverito): Gives the Department of Revenue jurisdiction to waive
      surety bond requirements for small businesses; and,
     Senate Bill 1578 (Madigan/Noland): Provides a $2,500 tax credit to small businesses for all
      full-time jobs the business creates and retains for a year.

The BIPARTISAN JOBS CREATION TASK FORCE believes the following ideas, presented at the
hearings, should be advanced in order to spur job creation and economic expansion throughout
Report of the Jobs Creation Task Force
Page 2
April 29, 2010

Several groups discussed the need to streamline the Illinois Environmental Protection Agency
and the Illinois Commerce Commission’s permitting process. SB 3344, which passed the
Senate and is in the House, requires the EPA to establish an expedited permitting system and
develop a generalized permitting application for specific categories. SB 3343 establishes
similar programs for utility pipelines. While the task force supports the concept in these bills,
they do not incorporate all of the ideas presented in the course of task force testimony.

   The task force proposes several steps to streamline this process including:

   •   Requiring the EPA to provide a checklist of documents that need to be provided and
       tests that need to be completed on their website for each permit so that the businesses
       can utilize information at the forefront of the process to reduce the time it takes to
       complete the entire process;
   •   Creating a program in which simple, standard permits can be granted automatically so
       long as the listed requirements are met;
   •   Eliminating duplicate fees and submissions, particularly for applicants who must apply
       for several permits regarding the same project;
   •   Allowing permit applications to be submitted online;
   •   Offering an expedited permit that would be available for an additional cost. This will
       include a ramp down reimbursement structure to discourage last-minute attempts to
       recover any previously paid fees; and
   •   Unifying the names and numbers of permits within the divisions of the EPA.

Illinois truck registration fees are currently $1,400 more than the average of states surrounding
Illinois; in part, because of the Commercial Distribution Fee passed by the General Assembly in
2003. This enlarged rate has caused Illinois to see a large decline of truck registrations
compared to the increase of registrations seen in the states that surround Illinois. For example:

                                                       Truck Registrations
                   Year                     Illinois                         Indiana
                   2003                    175,064                            94,068
                   2008                    163,453                           201,848

It is estimated that if Illinois kept up with the national average, it would have 35,653 more trucks
than today’s current count.
Using the 163,453 trucks that were registered in Illinois in 2008, a repeal of the Commercial
Distribution Fee would cost the state approximately $65,381,200. If Illinois sees a growth of
approximately 23,426 trucks, the elimination will be revenue neutral, but will create a substantial
number of new Illinois business jobs.
   The task force proposes to eliminate the Commercial Distribution Fee on Intra-state
   operators which is approximately $400 a truck.

Report of the Jobs Creation Task Force
Page 3
April 29, 2010

The success of the enterprise zones was spoken to by several committee presenters. Many
enterprise zones will begin to expire in December of 2012.
The Illinois Enterprise Zone Act took effect December 7, 1982. The first enterprise zones were
designated in 1983 and are due to expire in 2013 (except the South Beloit enterprise zone,
which expired Monday, March 1, 2010, because it is a 20-year zone, and local officials decided
not to avail themselves of the opportunity to go to 30 years). There are also several enterprise
zones established in 1990-1991 with 20-year terms that are due to expire in 2010-2011. Each of
these enterprise zones is currently eligible for an additional 10-year extension (30-year

    The task force proposes requiring the Department of Commerce & Economic Opportunity
    (DCEO) to provide a report to the General Assembly, which shall include the location of
    each enterprise zone along with the year that it is scheduled to end, and quantifiable
    information detailing the amount of growth each area has seen since the induction of the
    enterprise zone.
    The task force also supports negotiating Senate Bill 3661 (Bond/Currie) and Senate Bill
    3659 (Frerichs/Currie) to allow additional zones to be created and provide an expansion
    of these zones in a controlled manner.

    Other economic zone bills being considered by the taskforce include:

       House Bill 5811 (Black): Creates Job Renewal Zones and provides tax incentives to
        companies who locate in these rural areas with high unemployment. (Rules Committee,

       House Bill 5803(Caveletto): Creates a new class of Rural Enterprise Zones for those
        areas which have lost population over the past 40 years. (Rules Committee, House).

The EDGE program is designed to offer a special tax incentive to encourage companies to
locate or expand operations in Illinois when there is active consideration of a competing location
in another state. Currently, the company must add to the export potential of Illinois to qualify for
this credit. EDGE credits have proven to be useful tools in supporting the automotive
manufacturing industry in Illinois, particularly with Ford and Caterpillar.
In the course of receiving testimony, the task force heard from representatives of the aerospace and
rail industries who indicated that Illinois has unique advantages, such as the location of existing
airports, highways, rail lines, and waterways, with potential to expand as the economy recovers.
Similar testimony was heard regarding the bio-tech industry in light of Illinois’ many research
universities and recently constructed laboratories. Attracting investors and competing with
incentives offered by other states are major obstacles for small businesses within these fields.
Additionally, multiple presenters indicated that others states offer similar credits but provide credits
much faster than in Illinois; furthermore, other states allow for these credits to be transferred or sold
to provide a benefit when no tax liability is incurred.

Report of the Jobs Creation Task Force
Page 4
April 29, 2010

   The task force proposes to extend this credit to companies that would help Illinois achieve
   the railway goals set out by Governor Quinn and those that would further add to the
   aerospace and bio-technology fields.

   The task force also supports the concepts of HB 4861 (Walker) and HB 5335 (Berrios),
   which expand the EDGE Tax Credit Program by allowing an EDGE credit recipient to
   request a certificate of transferability from DCEO for any earned but unclaimed EDGE

   Other income tax credit bills being considered by the task force include:

      HB 5806 (Senger): Allows an employer issued credits under the EDGE program to retain
       taxes withheld under the Income Tax Act in lieu of receiving an income tax credit. (Rules
       Committee, House)

      HB 5808 (Hatcher): Provides an income tax credit of 25% of labor expenditures made by
       a manufacturing company. (Rules Committee, House)

Current economic conditions have caused community banks and credit unions to be much more
cautious in lending money to startup entrepreneurs and expanding small businesses – the
bedrock of economic growth and job creation. The Illinois Treasurer’s Office has conducted
extensive research on the challenges facing community banks and credit unions and has
explored initiatives that would encourage the renewal of small business lending opportunities.

   Working with the Treasurer’s Office, the task force proposes a new program, whereby the
   state, to provide both security and incentive to lenders, would act as the guarantor for
   qualified small business loans issued by community banks and credit unions. The program
   would provide a 10%-20% state guarantee for loans to small businesses that could not
   otherwise be secured through traditional financing. This 2-year pilot loan program is
   designed to bridge the gap between loans from family and friends and traditional SBA loans.
   There are special provisions for minorities, women, veterans, enterprise, and depressed
   economic zones. To minimize the state’s financial exposure, both interest and fees will be
   charged and set aside as an insurance fund.

The task force heard from many businesses and associations regarding difficulties in
discovering information currently made available by the state as to programs, tax credits, and
other advantages that Illinois provides to businesses locating in the state.
   The task force suggested several proposals to combat this problem including:
      The creation of a website through the Governor’s office which would allow a
       business to identify the county it is looking to locate in and be informed as to the
       programs, tax credits and other advantages Illinois offers in that area. This would
       include but would not be limited to enterprise zones, state-wide tax credits,

Report of the Jobs Creation Task Force
Page 5
April 29, 2010

       entrepreneurship centers and other programs and resources provided by the state.
       The task force believes that requiring the Governor’s Office to facilitate the creation
       of this website will help ensure interagency agreement.
      Having Department of Commerce of Economic Opportunity conduct exit interviews to
       businesses that leave the state and provide the General Assembly and the
       Governor’s Office an annual report as the reasons why business cited for leaving.
       DCEO would be required to send the survey to the last known contact of the
       business within 90 days of receiving information that the businesses’ license has
       lapse or the business has failed to file a business tax return for 2 years.

Motorola, one of Illinois’ most prominent employers, has indicated that the laws and regulations
which affect its daily operations must be consistent and that the consistency of regulations from
other states is a factor it considers when entertaining the possibility of relocation.
As an example, Motorola pointed to the recent Illinois E-Waste law in which Motorola was
initially provided with a letter of exemption, but then received a statement of expectations from
the Illinois Environmental Protection Agency. Although Motorola had been recycling these
materials well before the passage of the Illinois law, the administrative and auditing
requirements made the program cost-prohibitive. The unintended consequences of the Illinois
law stifled the very practice the law was designed to encourage and represents an area in which
the implementation has been inconsistent.

   The task force proposes to clarify and make more consistent the new e-waste regulations
   pertaining to the management of the proper disposal and recycling of materials used in IT
   products such as cell phones.

The Illinois New Markets Program provides tax credits to investors who finance community
development entities which, in turn, provide capital for small businesses within designated
regions. Currently, the program limits the total amount of tax credits that may be issued at $10
million. Several task force presenters have indicated that the program has been instrumental in
developing businesses in distressed areas, resulting in new manufacturing, educational, and
entertainment operations throughout the state. Senate Bill 2534 seeks to raise this cap to $40
million, as the current maximum has been reached even in this period of economic recession.
   The task force advocates increasing the amount of available tax credits to the greatest
   extent possible in an effort to attract investors to Illinois resulting in peripheral revenue in the
   form of income and sales tax extending from new jobs created by the business.

The Telecommunication Act is set to sunset at the end of 2010. The task force heard from many
presenters that increasing the emphasis on broadband in any rewrite of the Telecommunications
Act will help create jobs in Illinois.

Report of the Jobs Creation Task Force
Page 6
April 29, 2010

The Illinois Technology Partnership, the Illinois State Black Chamber of Commerce, and the
Illinois Hispanic Chamber of Commerce estimated that every $5 billion invested in broadband
infrastructure would directly create 100,000 new jobs in the telecommunications and information
technology fields. The study also cited that a 7% increase in broadband saturation would result
in 105,622 new or retained jobs and $4 billion in income growth.

   The Task Force supports updating the Illinois’ telecommunication laws to realize the job
   creation potential in this field and the task force also supports the continued bipartisan work
   to see House Bill 6425 become an agreed bill that would allow the telecommunications
   industry to create jobs while not loosening consumer protection.


The rail industry has taken advantage existing rail structures as well as the State’s highways,
waterways, airports and workforce to expand its role in the interstate transportation of people
and goods. Intermodal facilities allowing items to be transferred from rail carriers to trucks have
proven to be successful operations and have added numerous jobs in areas where railroads
and interstates intersect. As this division of the industry expands, construction to reduce
congestion and maintain roadways will be required.

   The Task Force supports the efforts of the rail industry to expand service within Illinois and
   to create additional intermodal facilities as identified in the Intermodal Facilities Promotion


The Governor’s proposed angel tax credit provides an income tax credit to those who invest in
operations recognized to spur innovation and create jobs. Under this program, the Department of
Revenue is to identify and certify business in which investments can be made to for qualify for this
exemption. These businesses must be headquartered in Illinois, must have less than 100
employees, at least half of which are employed in Illinois, and the business must not have been
operating in Illinois for more than 10 years.

The business must have the potential for creating jobs, engaged in the pre-commercialization
activity (research and development) in the areas of manufacturing, biotechnology, communications,
agriculture, clean energy, software or other innovative technology, but not engaged in real estate,
insurance, banking, consulting, retail trade, transportation, or health care services. These programs
typically include caps on the amount of credit that can be received by an investor and a maximum
amount of credits that can be issued by the state within a year. Credits may be sold or otherwise
transferred but 1% of the credit must be returned to the Department of Revenue as a transfer fee
and the investor must maintain the investment for a specific number of years.

The Task Force supports this tax credit.

Report of the Jobs Creation Task Force
Page 7
April 29, 2010


Senate Bill 2505 allows counties and municipalities to create green energy special service areas
in which commercial and residential property owners may obtain financing for improvements
designed to increase the energy efficiency of the property. Under this proposal, units of local
government may sell special service area bonds to be payable solely from the revenues or
income form special taxes levied within the areas. The bond proceeds would be used to finance
projects making energy improvements, renewable energy improvements and water use
improvements to or serving the designated properties.

The Task Force supports Senate Bill 2505 and other proposals that create special service areas
through tax credits and bonding which will entice business development, job creation and
economic growth.

   The task force also has identified several bills that have not been mentioned that the
    members believe should be signed into law including:
    -   House Bill 4599 (C. Gordon/Wilhelmi): creates a tax exemption for the energy
        expenses incurred by manufacturers. (Senate Rules)
    -   Senate Bill 1522 (Frerichs/Mendoza): requires the Department of Commerce and
        Economic Opportunity to establish and maintain a program to award grants to
        emerging-technology enterprises in the state.(House Rules)
    -   Senate Bill 2997 (Demuzio): provides a $7,500 tax credits for those purchasing newly
        constructed homes. (Senate Rules)
    -   Senate Bill 2559 (Koehler/Harris): provides an income tax credit in an amount equal
        to 25% of qualified expenditures incurred by a qualified taxpayer for the restoration
        and preservation of a qualified historic structure.(House- Revenue)
    -   Senate Bill 3655 (Kotowski/Currie): requires the Treasurer to segregate 2% of the
        investment portfolio for the Technology Development Account to attract and sustain
        new technology businesses within Illinois. (House- Rules)
    -   House Bill 4797 (Mautino/Harmon): extends property tax benefits to wind farms
        through 2016. (Senate Second Reading)
    -   HB 5807 (Reis): Offers a 30% state tax credit to attract wind turbine manufacturers to
        Illinois. (Rules Committee, House)

    -   HB 5810 (Mathias): Offers property and sales tax incentives for new or expanded
        renewable energy businesses. (Rules Committee, House)

    -   HB 5812 (Mathias): Re-enacts and expands the training expense credit as an incentive
        to employers to train and retrain employees. (Rules Committee, House)

Report of the Jobs Creation Task Force
Page 8
April 29, 2010

    -   HB 5805(Eddy): Creates a subsidized job-training program to offset the cost to
        companies who provide on the job training to unemployed workers. (Rules Committee,

    -   HB 4943 (Bassi): Creates a grant fund to attract small employers, minority owned
        business and green energy enterprises to Illinois. (Rules Committee, House)

    -   HB 4659 (Mitchell): Creates the Shared Work benefit Fund to support workers whose
        hours have been reduced in an effort to keep these workers employed rather than
        affording them unemployment benefits. (Rules Committee, House)

    -   Senate Bill 2550 (Harmon): Extends the “in-state” preference for renewable energy
        to 2016. (Senate Third Reading)
    -   House Bill 6349 (Beiser/Sullivan): Requires Illinois to use labor unions that have 90%
        or more members as Illinois residents.(Senate- Labor)
    -   Senate Bill 3482 (Steans): Promotes public-private partnerships for transportation by
        authorizing the Illinois Department of Transportation and the Illinois State Toll Highway
        Authority to enter into public-private agreements related to the development, operation,
        and financing of transportation facilities.(Senate Third Reading)


   Establish manufacturing excellence centers to assist Illinois industries with technical and
    engineering assistance, energy and ergonomic audits, and export development.
   Support public/private partnerships between colleges and employers which allow students to
    work in the field of industrial innovation and allow employers to influence the curriculum of
    certain classes based upon industrial needs.
   Encourage universities and businesses to work together and share resources to provide
    upper level engineering students to play a role in innovative design. These centers of
    Engineering Excellence or Manufacturing Excellence may be expanded with specific
   Explore the opportunities of the drug discovery field within the bio-tech industry which
    investigates certain diseases “orphaned” by the commercial drug industry, but nevertheless
    are required to alleviate global epidemics, such as malaria and tuberculosis.
   Investigate the use of bio-mass fuels. The City of Naperville is developing a program that will
    convert yard waste into flexible alternative fuels for municipal vehicles and electric power.
    Explore how this program would work at the state level and the possible creation of a
    public/private partnership to collect crop waste, energy crops, organic waste and woody
    biomass to be converted into commercial electricity, heat and fertilizer.


To top