Illinois General Assembly approves measure to create $400M economic development closing fund
On January 10, 2023, the Illinois General Assembly approved a bill creating a $400 million “deal-closing” fund that Governor J.B. Pritzker is widely expected to sign. The fund is intended to attract large manufacturers (including manufacturers of electric vehicles) to Illinois while easing requirements for tax breaks available under the state’s existing EDGE program.
The Illinois EDGE program offers special tax incentives to encourage businesses to locate or expand operations in Illinois. Under the new legislation, companies would be able to obtain tax breaks without first having to prove they would receive a more favorable tax break in another state.
Loans, mortgages, or other debt instruments will be offered by the State of Illinois to finance project costs associated with an expansion of business capacity and employment opportunities. The fund targets established industrial and service companies with “proven records of earnings.” The fund aims to attract large firms considering the location of a proposed plant. New ventures will be considered so long as “adequate security” is provided. All loans are conditioned on the project receiving additional financing from outside lenders. Loans will not be available for debt refinancing.
Governor J.B. Pritzker has described this program as a “closing fund” that will lure new businesses to Illinois. This same discretionary pool exists in states like Michigan, Ohio, and Texas. The legislation was prompted by the desire to facilitate the conversion by Stellantis of its jeep factory in Belvedere to EV production, although the program is more widely available to encourage the production of electric vehicles and other types of manufacturing in general.
The bill provides an initial $400 million in funding. The measure would take effect on January 1, 2024.
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