Support Enterprise Zone Extension & Reform

Illinois’ Enterprise Zone program has been deemed one of the most successful economic development tools by the Department of Commerce & Economic Opportunity along with businesses, local officials and economic development officials across the state. Since the program’s inception in 1982, more than 900,000 jobs have been created or retained in addition to $49 billion in capital investment. With zones set to begin expiring in 2013, the Illinois Manufacturers’ Association, Illinois Enterprise Zone Association and Taxpayer’s Federation of Illinois worked on a comprehensive reform and extension package that preserves an important economic development tool while increasing transparency and accountability. Key components include:

Long Term Extension: The legislation provides for 25-year long term extension of the Enterprise Zone program with a mandatory performance review of the zone at the midpoint. This ensures long term stability and predictability for job creators.

Competition: Both current communities and new communities that can meet at least three of the ten qualifying criteria may apply for an enterprise zone. Criteria include unemployment rate, infrastructure, EAV, plant closure/job loss, education, low income/ poverty rates, and high commercial and industrial vacancy.

Increases the Number of Zones: In addition to the current 97 zones, five new zones will be added over the next two decades as current River’s Edge Zones expire and those areas become enterprise zones.

Fiscal Responsibility: The legislation eliminates three tax incentives that are not critical to the core mission of enterprise zones. This will save the state millions of dollars while ensuring that this economic development tool is available to attract investment.

Accountability: All companies receiving tax benefits from enterprise zones and high impact businesses will be required to annually report their tax incentive information annually to the Department of Revenue that will aggregate the information for reporting back to the General Assembly. Tax information will be kept confidential. A new Enterprise Zone Board is vested with the power to approve or deny decisions made by DCEO to ensure that proper criteria are met.

Strong Sales Tax Exemption Reform: Contractors and subcontractors working for high impact businesses and enterprise zone projects will be required to get a specific certification from the Department of Revenue that will ensure the sales tax exemption certificate is not being used improperly. Revenue will be able to track and audit these contractors to ensure compliance.

SUPPORTED BY:

Illinois Manufacturers’ Association
Illinois Enterprise Zone Association
Taxpayers Federation of Illinois
Illinois Retail Merchants Association
Illinois Association of Realtors
Chicagoland Chamber of Commerce
Southland Chamber of Commerce
Illinois Renewable Fuels Association
Valley Industrial Association
Chemical Industry Council of Illinois
Greater Springfield Chamber of Commerce
Southwest Illinois Employers Association
Owens-Illinois, Inc.
Archer Daniels Midland
Caterpillar
United Scrap Metal
Chrysler
Nucor Steel
City of Peoria

Illinois Enterprise Zone Program Termination Date Extension Legislation

Notice to Members of IEZA

For the second year in a row IEZA legislation under consideration by the Illinois 96th and 97th General Assemblies has reached the end of the normal legislative cycle without final consideration by the Illinois House of Representatives.  Just as happened in 2010 (SB3659 – 20 year extension, became the Illiana Expressway Act) and has now happened in 2011, the IEZA sponsored bill (formerly SB1633) was shelled and became a measure to accomplish deferred borrowing for the State’s financial woes.  Bills both years passed unanimously from the Senate side over to the House where they failed to be released from committee.

This year, with assistance from various other supportive organizations, IEZA participated in special hearings of the House Revenue Committee and was unsuccessful in advancing the bill.  Several draft suggestions for language were considered and assurances we were assured that there would be no Prevailing Wage mandate language in a final bill.  The enterprise zone program was considered with potential TIF reforms by the committee and attempts to consider the programs apart from each other were unsuccessful.  Committee members opined that the programs were similar and that they should be considered together.  The last amendment IEZA was given to look at included language that would have made the Building Material Sales Tax Exemption function by way of a rebate program.  IEZA pointed out that this method would in fact mandate Prevailing Wage due to the direct exchange of funds with the State as mandated in PA 96-0058 (SB0223).

So, our bill this year was changed into something else, and this has caused some confusion about extension of the program.  Some around the state have reported that extension passed but that is not the case.  Only the bill number was the same at the end of the session and was ultimately a budget measure.  We continue to work on our IEZA message emphasizing the critical worth of the program and the urgency of getting it passed so incentives, which have in some cases already been reduced to virtually nothing, can be restored.

Special Hearings regarding consideration of business climate/taxation and incentives are being held by Representative Bradley and the House Revenue Committee with the first taking place in Chicago on July 19 in Chicago and two others to follow on August 2 in Rockford and August 23 in Springfield.  IEZA is continuing to provide input through this process.

Meanwhile, IEZA suggests to our membership continuous contact with your respective members of the General Assembly to urge them to advance IEZA’s proposed 20-year extension of the program for the betterment of Illinois and the economic health of our zone communities.

ILLINOIS ENTERPRISE ZONE ASSOCIATION SUPPORTS SB-1633 & HB-1442

9, April, 2011 – URGENT TO MEMBERS OF THE ILLINOIS GENERAL ASSEMBLY

(This document may be downloaded for printing at the bottom of this article.)

The Illinois Enterprise Zone Association (IEZA) supports passage of Senate Bill-1633 or House Bill-1442 which seek to extend the term of the Illinois Enterprise Zone Program for an additional twenty (20) years. The Illinois Enterprise Zone Program is a proven economic development partnership between the State of Illinois and local units of government and has a documented history of making the difference for projects seeking to locate in Illinois. The incentives allowed under the Enterprise Zone Program have enabled both existing companies and new ventures alike to make decisions regarding job creation, job retention and capital investment resulting in a stronger Illinois economy.

SB-1633 or HB-1442 would extend the Zone Program for twenty (20) years similar to a previous extension accomplished by the 91st General Assembly and signed by the Governor in 2000. As one of these bills leading proponents the IEZA Membership represents more than three-fourths (3/4ths) of the zone professionals in the State of Illinois including the overwhelming majority of the ninety-seven (97) zones themselves. The IEZA and its leadership believe the Illinois Enterprise Zone Program to be of particular importance in today’s highly competitive world of economic development. Recent negative impacts to Illinois resulting from a national and global economic crisis make it even more important to preserve and extend this program.

SB-1633 and HB-1442 are supported by IEZA. These bills, Sponsored by Senator Mike Frerichs (D) of Champaign and Representative Frank Mautino (D) of Spring Valley, contain language to extend the zone program in support of economic development in Illinois. IEZA appreciated the cooperation demonstrated to support this issue in the previous General Assembly and urges all legislators to support the bill. IEZA also values the efforts of our other sister organizations from across the State of Illinois including the Illinois Municipal League, Illinois Chamber, Illinois Manufacturer’s Association, Illinois Development Council and others who have worked to bring this extension legislation to the 97th General Assembly.

SB-1633 or HB-1442 preserve one of the few available Illinois’ incentive programs. Further, they do so using mechanisms that primarily result in a self-funding methodology that utilizes local property tax abatement with formulas voluntarily created and agreed to by local taxing districts; building material sales tax exemptions initiated jointly by the State of Illinois and the local jurisdictions; and various other investment and income tax credits to incent projects through business income tax credit allowances. All of these incentives are governed under a “but-for” imperative in the Enterprise Program which only grants incentives if a project is undertaken by an existing company for new investment in Illinois or for a new company coming to an Illinois enterprise zone. It is a quid pro quo that results in no incentive if there is no investment made or jobs created.

The past ten (10) years’ DCEO annual reports to the General Assembly on Enterprise Zone job retention, creation and investment total as follows:

Jobs Retained: 188,031
Jobs Created: 159,235
Total Investment: $ 29.423 billion

This successful record of the Illinois Enterprise Zone Program speaks for itself. Documented investments in buildings and capital equipment totaling nearly $30 billion have assured that nearly 350,000 Illinois citizens received or kept their jobs here in Illinois. These were only the direct jobs reported and do not include all of the beneficial spin off. The Illinois Enterprise Zone Program enabled those investments and helped to retain and create those jobs. By extending this valuable program SB-1633 or HB-1442 will strengthen Illinois, create investment, and retain and create jobs for Illinois citizens.

Unless the General Assembly acts to extend the Zone Program, enterprise zones will soon begin to expire all across Illinois. Numerous zones are now operating with diminished or no incentives due to their proximity to their expiration dates. The time is now to enact this extension legislation. The time is now to send a message that Illinois is interested in and wants to support economic development and business investment here in our great state.

Why Support SB-1633 or HB-1442?

  • Preserves enterprise zones as a premier economic development tool in Illinois’ tool box. Nothing else is out there to create the kind of incentives zones bring.
  • Illinois Enterprise Zones have a proven record of stimulating investment and job creation for both existing Illinois companies and for helping those companies from outside our state to decide to come to Illinois ($30 billion and 350,000 jobs).
  • Would result in increased investment and job retention and creation resulting in stabilized and increased state revenues (investment and job creation = State revenue).
  • Ask yourself “Is now the time to send this positive message?” We say yes!

We sincerely and respectfully ask you to support Senate Bill-1633 or House Bill-1442 and to enact the legislation in this spring session of the 97th General Assembly.

Illinois Enterprise Zone Association
200 East Knox Street
Morrison, Illinois 61270

John R. Thompson, President
(815) 284-3361
dchamber@essex1.com

Betty Steinert, Past President
(815) 772-5175
bsteinert@whiteside.org

 

Support SB-1633 or HB-1442 66.40 Kb

IEZA Supports HB-6900: Urgent

URGENT TO MEMBERS OF THE ILLINOIS GENERAL ASSEMBLY
(find pdf of this story at the bottom of this article)

The Illinois Enterprise Zone Association (IEZA) supports passage of House Bill-6900 which seeks to extend the term of the Illinois Enterprise Zone Program for an additional twenty (20) years. The Illinois Enterprise Zone Program is a proven economic development partnership between the State of Illinois and local units of government and has a documented history of making the difference for projects seeking to locate in Illinois. The incentives allowed under the Enterprise Zone Program have enabled both existing companies and new ventures alike to make decisions regarding job creation, job retention and capital investment resulting in a stronger Illinois economy.

HB-6900 would extend the Zone Program for twenty (20) years similar to a previous extension accomplished by the 91st General Assembly and signed by the Governor in 2000. As one of the bill’s leading proponents the IEZA Membership represents more than three-fourths (3/4ths) of the zone professionals in the State of Illinois including the overwhelming majority of the ninety-seven (97) zones themselves. The IEZA and its leadership believe the Illinois Enterprise Zone Program to be of particular importance in today’s highly competitive world of economic development. Recent negative impacts to Illinois resulting from a national and global economic crisis make it even more important to preserve and extend this program.

HB-6900 is supported by IEZA. This bill, Sponsored by Representative Robert Flider (D) of Decatur, is identical in language to last spring’s SB-3659 which was a good example of both sides of the aisle demonstrating support for economic development in Illinois. IEZA appreciates the cooperation demonstrated to support this issue in the General Assembly and urges all legislators to support the bill. IEZA also values the efforts of our other sister organizations from across the State of Illinois including the Illinois Municipal League, Illinois Chamber, Illinois Manufacturer’s Association, Illinois Development Council and others who have worked to bring this extension legislation to the 96th General Assembly.

HB-6900 preserves one of the few available Illinois’ incentive programs. Further, it does so using mechanisms that primarily result in a self-funding methodology that utilizes local property tax abatement with formulas voluntarily created and agreed to by local taxing districts; building material sales tax exemptions initiated jointly by the State of Illinois and the local jurisdictions; and various other investment and income tax credits to incent projects through business income tax credit allowances. All of these incentives are governed under a “but for” imperative in the Enterprise Program which only grants incentives if a project is undertaken by an existing company for new investment in Illinois or for a new company coming to an Illinois enterprise zone. It is a quid pro quo that results in no incentive if there is no investment made or jobs created.

The past ten (10) years’ DCEO annual reports to the General Assembly on Enterprise Zone job retention, creation and investment total as follows:

Jobs Retained: 188,031

Jobs Created: 159,235

Total Investment: $ 29.423 billion

This successful record of the Illinois Enterprise Zone Program speaks for itself. The past ten years of documented investments in buildings and capital equipment totaling nearly $30 billion have assured that nearly 350,000 Illinois citizens received or kept their jobs here in Illinois. These were only the direct jobs reported and do not include all of the untold spin off created by enterprise zone projects across the state. The Illinois Enterprise Zone Program enabled those investments and helped to retain and create those jobs. By extending this valuable program HB-6900 will strengthen Illinois, create investment, and retain and create jobs for Illinois citizens.

Unless the General Assembly acts to extend the Zone Program, enterprise zones will soon begin to expire all across Illinois. Several zones are already operating with “impaired” incentives due to their proximity to their expiration dates. The time is now to enact this extension legislation. The time is now to send a message that Illinois is interested in and wants to support economic development and business investment here in our great state.

Why Support HB-6900?

  • HB-6900 preserves enterprise zones as a premier economic development tool in Illinois’ tool box. Nothing else is out there to create the kind of incentives zones bring.
  • Illinois Enterprise Zones have a proven record of stimulating investment and job creation for both existing Illinois companies and for helping those companies from outside our state to decide to come to Illinois ($30 billion and 350,000 jobs).
  • HB-6900 would result in increased investment and job retention and creation resulting in stabilized and increased state revenues (investment and job creation = State revenue).
  • Ask yourself “Is now the time to send this positive message?” We say yes!

We sincerely and respectfully ask you to support House Bill-6900 without further amendment and to enact it this fall session of the 96th General Assembly.

Illinois Enterprise Zone Association
200 East Knox Street
Morrison, Illinois 61270

John R. Thompson, President
(815) 284-3361
dchamber@essex1.com

Betty Steinert, Past President
(815) 772-5175 
bsteinert@whiteside.org

IEZA Supports HB-6900 61.55 Kb

 

Vote NO on Senate BILL 43 (update!)

PRESERVE VITAL ECONOMIC DEVELOPMENT TOOLS

SB 43 will deal a devastating blow to the effectiveness of the Enterprise Zone Program. The legislation requires payment of prevailing wage rates for labor on all construction projects that take place within the boundaries of Enterprise Zones and even when public funds are not utilized in the construction project.

Reason for Opposition:

  • This bill would mandate a change of Prevailing Wage from its traditional role in government funded Public Works projects to a new government mandate on virtually all private sector commercial and industrial construction projects in 97 Enterprise Zones across the state. What this means is that if an existing business wants to expand or a new business locate within the Enterprise Zone whether they would receive any benefits they would have to pay Prevailing Wage for construction projects.
  • Requiring payment of prevailing wages rates will have a large impact on the cost of construction and maintenance projects. So much so that prevailing wage could make many projects cost prohibitive with shelved projects direct results. These zones were setup to help blighted areas, how is this helping blighted areas when the legislation will make it cost prohibitive for renovation and new construction?

UPDATE: Please continue to keep an eye on this bill .  SB43 final action deadline was extended to November 30, 2009.  This means it will be the veto session before it will be acted on again and will need a super majority vote to pass.  We will post any updates as we hear about them.  Thank you for all of your hard work to stop this bad bill!

Betty J. Steinert, President
John Thompson, Vice President

IEZA Opposes HB-063 and SB-043

URGENT!

The Illinois Enterprise Zone Association (IEZA) is opposed to House Bill-063 and Senate Bill-043 which seek to expand the scope of Prevailing Wage in Illinois and would have the direct effect of killing the Illinois Enterprise Zone Program. Further, HB-063 and SB-043 have similar impacts on an undetermined number but certainly many of Illinois’ Tax Increment Redevelopment Districts (TIFs).

HB-063 and SB-043 would expand the scope of Prevailing Wage to include nearly every project except for owner occupied residential in any enterprise zone in Illinois and would require Prevailing Wage for even those undertaken by the private sector including all commercial or industrial projects for new construction or renovation by new or existing businesses. This massive escalation of cost applied to virtually all work done in enterprise zones would be mandated by the language contained in HB-063 and SB-043. It would also apply to work performed on any equipment in the zone. Manufacturers simply cannot afford to be held to a prevailing wage mandate to perform “maintenance, repair, assembly, or disassembly work” on their equipment. 

TIF Districts located in municipalities would suffer the same impacts from HB-063 and SB-043 if they are located within an Illinois Enterprise Zone. IEZA believes this is the case for many TIF Districts and Enterprise Zones across the State of Illinois. IEZA believes because of this that HB-063 and SB-043 have the potential to devastate the Enterprise Zone Program and TIF Program in Illinois and to seriously damage the Illinois economy, Illinois business environment and economic development in every corner of Illinois. 

Enterprise zones are one of Illinois’ most important economic development tools used to enable the retention and recruitment of business investment and job creation throughout Illinois. When coupled with the direct effects of HB-063 and SB-043 on the TIF Program as well there is the potential to remove two of the most effective economic development programs we have. IEZA strongly OPPOSES HB-063 and SB-043.

Why Oppose HB-063 and SB-043?

  • HB-063 and SB-043 expands prevailing wage beyond the current public works arena to any project in an Illinois enterprise zone including private sector projects. This is hugely different from the original purposes of the Prevailing Wage Act.
  • Cost increases that would result from HB-063 and SB-043 would be a major disincentive to investment and resultant job creation or retention by existing or new Illinois business enterprises.
  • In the case of municipalities, under HB-063 and SB-043, their own workers would fall under prevailing wage if they did any work in an enterprise zone. This would result in increased wage/benefit costs and potential administrative costs and accounting as well.
  • The Illinois economy needs business stimulation and strengthening of our incentive programs not further disincentives that erode our existing economic tools such as Enterprise Zone and TIF.
  • Compliance provisions of HB-063 and SB-043 are onerous on their own with written notices, penalties, contract and bond provisions and listings of “firsttier contractors” along with prohibitions on the hiring of contractors or subcontractors appearing on the DOL list of violators of the Act. In short… House Bill-063 and Senate Bill-043 are BAD for Enterprise Zones; BAD for TIF Districts; BAD for business; BAD for economic development; BAD for Illinois; and BAD legislation.

In short… House Bill-063 and Senate Bill-043 are BAD for Enterprise Zones; BAD for TIF Districts; BAD for business; BAD for economic development; BAD for Illinois; and BAD legislation.

Although House Bill-063 and Senate Bill-043 are in early stages of the legislative process like their predecessor bill HB-0773 in the last General Assembly, IEZA has not seen any language either past or proposed that does anything in any of these bills but create the huge mess of problems listed in the bullet points above. IEZA believes that, based on the history of similar bills or whatever language may come forth House Bill-063 and Senate Bill-043 should be opposed by any organization or individual in Illinois who desires to see our state able to compete with our neighboring states, region and the rest of the country.

Contact your legislators immediately and ask them to OPPOSE House Bill-063 and Senate Bill-043!

Illinois Enterprise Zone Association
200 East Knox Street
Morrison, IL 61270

Betty Steinert, President
815-772-5175
bsteinert@whiteside.org

John Thompson, Vice President
815-284-3361
dchamber@essex1.com

IEZA Opposes House Bill 773 – Action Required

ILLINOIS ENTERPRISE ZONE ASSOCIATION OPPOSES HOUSE BILL 773

MOST URGENT

The Illinois Enterprise Zone Association (IEZA) is opposed to House Bill 773 which seeks to expand the scope of Prevailing Wage in Illinois and would have the direct effect of killing the Illinois Enterprise Zone Program. Further, House Bill 773 has similar impacts on an undetermined number but certainly many of Illinois’ Tax Increment Redevelopment Districts (TIFs).

House Bill 773 would expand the scope of Prevailing Wage to include nearly every project except for owner occupied residential in any enterprise zone in Illinois and would require Prevailing Wage for even those undertaken by the private sector including all commercial or industrial projects for new construction or renovation by new or existing businesses. This massive escalation of cost applied to virtually all work done in enterprise zones would be mandated by the language contained in House Bill 773. It would also apply to work performed on any equipment in the zone. Manufacturers simply cannot afford to be held to a prevailing wage mandate to perform “maintenance, repair, assembly, or disassembly work” on their equipment.

TIF Districts located in municipalities would suffer the same impacts from House Bill 773 if they are located within an Illinois Enterprise Zone. IEZA believes this is the case for many TIF Districts and Enterprise Zones across the State of Illinois. IEZA believes because of this that House Bill 773 has the potential to devastate the Enterprise Zone Program and TIF Program in Illinois and to seriously damage the Illinois economy, Illinois business environment and economic development in every corner of Illinois.

Enterprise zones are one of Illinois most important economic development tools used to enable the retention and recruitment of business investment and job creation throughout Illinois. When coupled with the direct effects of House Bill 773 on the TIF Program as well there is the potential to remove two of the most effective economic development programs we have. IEZA strongly OPPOSES House Bill 773.

Why Oppose HB-773?

  • HB-773 expands prevailing wage beyond the current public works arena to any project in an Illinois enterprise zone including private sector projects. This is hugely different from the original purposes of the Prevailing Wage Act.
  • Cost increases that would result from HB-773 would be a major disincentive to investment and resultant job creation or retention by existing or new Illinois business enterprises.
  • In the case of municipalities, under HB-773, their own workers would fall under prevailing wage if they did any work in an enterprise zone. This would result in increased wage/benefit costs and potential administrative costs and accounting as well.
  • The Illinois economy needs business stimulation and strengthening of our incentive programs not further disincentives that erode our existing economic tools such as Enterprise Zone and TIF.
  • Compliance provisions of HB-773 are onerous on their own with written notices, penalties, contract and bond provisions and listings of “first-tier contractors” along with prohibitions on the hiring of contractors or subcontractors appearing on the DOL list of violators of the Act.

In short… House Bill 773 is BAD for Enterprise Zones; BAD for TIF Districts; BAD for business; BAD for economic development; BAD for Illinois; and BAD legislation.

Although House Bill 773 is currently sitting as a shell bill, IEZA has not seen any language either past or proposed that does anything but create the huge mess of problems listed in the bullet points above. IEZA believes that, based on the history of the bill, whatever language may come forth House Bill 773 should be opposed by any organization or individual in Illinois who desires to see our state able to compete with our neighboring states, region and the rest of the country.

Contact your legislators immediately and ask them to OPPOSE House Bill 773!!!

Illinois Enterprise Zone Association
200 East Knox Street
Morrison, Illinois 61270

Betty Steinert, President
(815) 772-5175
bsteinert@whiteside.org

John Thompson, Vice President
(815) 284-3361
dchamber@essex1.com

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