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County receives another M & E tax remedy

Governor signs legislation allowing for second EDPA

Grundy County has a two-year window in which to set up a second Economic Development Project Area to bring new investment into the region.

“It’s an economic development tool for us in that it levels the playing field and mitigates the issue of the M&E tax,” Missy Durkin, a spokesman for the Grundy Economic Development Council, noted Friday of the EDPAs.

“It levels the playing field for us when we’re trying to attract economic development.”

Gov. Pat Quinn on Monday approved the legislation, which allows the county to establish the EDPA. There is a two-year time limit from the date of his signing to set up the district.

Grundy County’s M&E tax is a unique taxing structure under which heavy industrial machinery and equipment are taxed as real property. The state’s other 101 counties classify machinery and equipment as personal property, which is not taxed in Illinois.

The EDPA is similar to a Tax Increment Financing District, and is designed to lessen the impact of the M&E tax.

When the first EDPA — consisting of 12,000 acres — was formed in 2006, the assessed valuation was frozen within the district. As the assessed valuation within the EDPA increases, the additional property taxes are placed in a special fund to assist industries to build in the area, and to help offset the M&E tax.

State Rep. Careen Gordon, D-Morris, who led the way for Monday’s bill signing, also initiated the legislation in 2005, which provided for establishment of the initial EDPA.

At the time, it was assumed Grundy County could establish up to five EDPA areas, but the number was later questioned. Gordon’s current legislation allows the county to establish one more EDPA, at a maximum 2,000 acres.

Gordon said the county must also show that investment would not happen without the EDPA.

“One of my top priorities during this legislative session has been to help revitalize the economy in the 75th Legislative District,” Gordon noted Thursday in a press release.

“The first step to success in that effort is to ensure new businesses are attracted to the communities in my district. The project area ... will assist Grundy County in attracting the businesses that will potentially bring temporary and full-time work to those struggling in these tough economic times.”

Although no site has yet been selected for the second EDPA, two areas are being considered. A joint review board will be involved in the consideration, which includes the Grundy County Board, the GEDC, and communities within the proposed districts.

“We’ll see where the best fit is,” Durkin said, indicating a lot of weight toward the selection will probably come from the GEDC and the county board.

So far, no business or industry has indicated an interest in locating in either the current or  proposed EDPA.

Several distribution centers located inside the boundaries of the first zone, but no business or industry has arrived to take advantage of the M&E exception, Durkin noted.

Distribution centers have little taxable machinery or equipment, so they use the county’s standard tax abatement.

The GEDC was not taken by surprise at the governor’s action Monday.

“We appreciate the efforts by Representative Gordon and State Senator (Gary) Dahl, (R-Granville), to make sure we knew the process was going through,” Durkin said.

“Representative Gordon led the charge in pursuing the bill. The morning it was signed, the governor’s office let us know it was going through.”

Gordon is confident the county, GEDC, and Grundy County Chamber of Commerce and Industry will make a success of the second EDPA.

“This is just one more incentive Grundy County has to offer businesses looking to bring jobs to, and invest in, our communities,” she noted.

Grundy County Board Chairman Frank Halpin noted the amount of hard work that went into the legislation.

“We look forward to continuing to work with Representative Gordon to make Grundy County more competitive in attracting new industries,” he said.

The first EDPA covers an area between Morris and Minooka. The area is on both sides of Interstate 80, and extends south of the Illinois River. Existing industries within that area — LyondellBasell, Akzo-Nobel, Reichhold Chemical, and Dresden Station — are excluded from the district.

The new EDPA will be limited to one locality and involve fewer taxing districts than the first district.

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