Illinois Corporate Accountability in Tax Expenditures Law

In August 2003 Illinois became the latest state with annual, company-specific disclosure of economic development subsidies when Governor Rod Blagojevich signed HB 235, the Corporate Accountability in Tax Expenditures Act, into law.

Representatives Jack Franks (D) and Don Moffit (R), Senator James F. Claiborne (D), and eventually 50 other Illinois legislators sponsored the bill. The initial sponsors represented districts where companies like Motorola and Maytag had shut down production after getting large state and local development subsidies.

The lead advocate for the bill was the Illinois AFL-CIO, headed by President Margaret Blackshere. The AFL-CIO was joined by SEIU, AFSCME, the Machinists, Citizen Action/Illinois, and the Center for Tax and Budget Accountability in a broad corporate accountability reform program. Good Jobs First-Illinois provided this coalition technical assistance and "best practices" research. The new law is on-line at
http://www.ilga.gov/legislation/publicacts/fulltext.asp?name=093-0552&GA=093

HB 235, now Public Act O93-0552, mandates the following:

  • An annual unified development budget, listing all state aid including tax expenditures and the Illinois Department of Transportation's Economic Development Program.

  • Standardized information (including number, type, and average wage levels of jobs to be created) is to be included in all subsidy assistance applications, and an electronic tracking system for all state economic development aid is to be created. The electronic system went online in June 2005. It can be found at http://corpacctportal.illinois.gov/

  • Annual progress reports to the Department of Commerce and Economic Opportunity (DCEO) from state-subsidized companies, to be posted electronically.

  • Clawbacks, or recapture provisions, to be extended to previously exempt programs: the Business Development Public Infrastructure program, Industrial Training Program, and Large Business Development program. EDGE corporate income tax credits will be recaptured in full if a company receiving them shuts down the project in the first five years.

  • DCEO must report annually the number of companies getting subsidies, and the number of defaults and recaptures of state subsidies. Reasons for DCEO recapture waivers must be published electronically.

  • Companies getting subsidies must reach job and investment goals within time limits set by authorizing legislation or by administrative rules, or be subject to full or partial recapture.

  • Companies that default or fail to make investment/job goals must repay subsidies received in the year of the default.

The new law addresses many of the problems identified in Good Jobs First's January 2003 report, A Better Deal for Illinois: Improving Economic Development. See that report at http://www.goodjobsfirst.org/pdf/il.pdf.