Senate Majority Leader James F. Clayborne, Jr. (D- Belleville) advanced legislation in the Senate this year designed to bolster local development in low-income areas throughout Illinois. Clayborne's initiative is an expansion of the existing New Markets Development Program.

The program was created by Clayborne in 2008 to reward businesses for investing in high-need areas, in the form of tax incentives. The program is administered by the Department of Commerce and Economic Opportunity (DCEO) and offers supplemental funding for qualified equity investments in low-income community development projects and low-income communities in Illinois. The program proved to be very successful, allocating all credits within the first 6 months.

The Senate passed SB 2534 this spring, increasing the annual tax credit limit of the New Markets Development Program to $40 million from the previous annual limit of $10 million. When the House failed to act on the measure, similar language was added to SB 2093. However, the annual tax credit limit was capped at $20 million. 

"Since the program’s inception, the State’s initial $10 million investment has grown to become $125 million worth or private investment in low-income communities," Clayborne said. "By expanding the State’s investment to $20 million, we are looking at generating clost to half a billion dollars in private investment in our state over the course of the next two years. This is an investment we must make to improve our communities and the financial health of the State."

The tax credits offered under the program can be used against any income, franchise, or insurance premium tax under Illinois law. The tax credits cannot be used until two years after the investment, preventing any chance of fraud or abuse.

"We have strict regulations built into this program to ensure that businesses are not trying to take advantage of the State," Clayborne stated. "We want to help out businesses and foster growth, but the State’s investment is contingent upon reciprocal investment from private partnerships. This process allows both parties to grow and makes them mutually dependent upon one another."

Senate Bill 2093 was signed into law by Governor Quinn on June 23.