South Suburban Mayors & Managers Discuss Enterprise Zones

Lee Edwards | As of Wednesday, February 19, 2014

G. Allen Mayer, Deputy General Counsel for IDCEO, provided information on the specifics of enterprise zones and took questions from the audience during a recent meeting hosted by the Illinois Department of Commerce and Economic Opportunity (IDCEO) about the benefits of applying for enterprise zones.
G. Allen Mayer, Deputy General Counsel for IDCEO, provided information on the specifics of enterprise zones and took questions from the audience during a recent meeting hosted by the Illinois Department of Commerce and Economic Opportunity (IDCEO) about the benefits of applying for enterprise zones.

The South Suburban Mayors & Managers Association (SSMA) recently hosted a presentation by the Illinois Department of Commerce and Economic Opportunity (IDCEO) about the benefits of applying for "enterprise zones."

An enterprise zone is a designated land area located inside a municipality, generally described as an impoverished/depressed area in which incentives such as tax concessions are offered to encourage business investment and provide jobs for the residents.

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Ed Paesel, Executive Director, South Suburban Mayors & Managers Association

“We’re hoping that our communities that are interested in this issue by maintaining their existing enterprise zone or those that may want to have one that never had one [are] fully informed as to what the requirements are to have an enterprise zone,” said Ed Paesel, South Suburban Mayors & Managers Association Executive Director. “That’s the main thing that we want to accomplish is information sharing so that the communities can make a rational decision as to whether they want to move forward.”

The benefits of an enterprise zone include: sales tax exemption on building materials, machinery, equipment, utilities; a state investment tax credit of 0.5%; jobs tax credit that allows a business $500 credit on Illinois income taxes for each job created in the zone; dividend income deduction; interest deduction; etc.

The presenter, G. Allen Mayer, Deputy General Counsel for IDCEO, provided information on the specifics of enterprise zones and took questions from the audience. Over fifteen municipalities were represented and over thirty individuals were present. Cook and Will county representatives were in attendance to assist with questions and to disseminate information.

Recently, elected Illinois state officials passed legislation to amend two articles of the state’s Illinois Enterprise Zone Act (20 ILCS 655), Public Act 97-905 and Public Act 98-109. The relevant changes to the law Public Act 97-905:

· The number of enterprise zones remained the same (97)

· Ten new categories have been created for enterprise zone selection purposes

· Creation of the Enterprise Zone Board (EZB), whose objective is to approve or deny enterprise zone applications

· IDCEO scores applications, yet, the EZB has the final decision

· Automatic extension of expiring enterprise zones scheduled to expire before July 1, 2016

· Fifteen year term for enterprise zones with a review by the EZB after 13 years for a possible 10 year extension

· Reporting to the IDCEO

The relevant changes to the law Public Act 98-109 are:

· Deadline for enterprise zone applications is December 31, 2014. (Applicants do not receive additional consideration for early submissions.)

· IDCEO is required to score applications with partial points

Enterprise zone applicants must meet at least three of the ten following specifications:

· Large scale business closings

· Vacant structures

· Tax base improvement plan

· Unemployment

· Employment Opportunities

· Poverty

· Abandoned coal mine, brownfield or federal disaster area

· Public infrastructure improvement plan

· Career skills programs

· Equalized assessed valuation

During his presentation, Mayer explained the differences between TIFs (Tax increment financing) and enterprise zones.

“The difference between a TIF and an enterprise zone is a TIF is pretty much a local economic development tool that a municipality has that sort of forces everybody into it,” said Mayer. “[An] enterprise zone is primarily state economic development tool which needs to go through the different tax breaks which are mostly at the state level. A TIF can coordinate with an enterprise zone [but] you can’t have both a TIF and enterprise zone property tax benefit.”

The South Suburban Mayors and Managers Association (SSMMA) is an intergovernmental agency providing technical assistance and joint services to 43 municipalities representing a population over 650,000 in Cook and Will Counties. 

For more information visit http://www.illinois.gov/dceo/Pages/default.aspx.

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