Oct. 02--Archer Daniels Midland Co. disclosed Tuesday that it is seeking as much as $24 million in incentives from the state over the next two decades to keep its headquarters in Illinois.
Decatur-based ADM is among at least three companies asking to keep employees' personal income tax withholdings that otherwise would go into state coffers. Specifically, ADM wants $1.2 million a year for 15 to 20 years.
The grain giant, whose sales last year were $89 billion, has years in which its state corporate income tax liability is minimal, Ray Young, ADM's chief financial officer, said at an informational hearing in Chicago held by the House Revenue and Finance Committee.
If lawmakers approve a bill ADM is pushing, it will join a select number of companies that retain employees' income tax withholdings. That group includes Motorola Mobility, Sears Holdings Corp., Navistar International Corp. and Ford Motor Co.
Two other companies that appeared at the hearing also are asking for the same treatment. They were Swiss insurance company Zurich and wholesale distributor United Stationers Inc. Redmond, Wash.-based chemical distributor Univar Inc., which is considering moving its headquarters to Illinois, also is seeking tax credits against payroll taxes.
ADM's request received a cold response from lawmakers.
"You are asking us to change the state's tax policy to give a leg up to this particular corporation," said House Majority Leader Barbara Flynn Currie, D-Chicago.
Currie also said she was troubled with the idea of spending state tax dollars to take jobs away from Decatur.
"It essentially is blackmailing the state. It essentially is saying, if you don't jump to, if you don't go do this for us, we might think about going somewhere else," Currie said.
Currie also said she was worried ADM would use the pending legislation as a bargaining chip to extract even more breaks from Illinois. She said the legislation seemed premature since ADM hadn't yet applied for an incentive package from the Department of Commerce and Economic Opportunity.
In response, ADM officials said that once the bill is passed, it plans to submit an application. It also pledged not to seek utility tax breaks, which were part of the bill filed Friday.
ADM announced last week it is searching for a new city for its headquarters to make international travel and employee recruitment easier. At the hearing, it said its suitors include cities in the U.S. and around the world, but it declined to name them. Chicago is the preferred city, according to sources. The company operates in 75 countries.
"Although we are not discussing our process very openly, we are getting a lot of interest," said Greg Webb, ADM's vice president of state government relations.
Mike Kasper, an attorney representing ADM with deep connections with House Democrats and Mayor Rahm Emanuel, said the company continues to lobby lawmakers to amend language in the state's Economic Development for a Growing Economy tax credit program, or EDGE.
The program allows a business to claim a credit against its corporate income tax liability. Once accepted into the program, a company applies annually for a tax credit certificate, similar to a voucher, which it can claim when it files its taxes.
If a company qualifies for a tax credit certificate but doesn't have any taxes to offset, it can carry over the unused credits for as many as five years. About two-thirds of companies in the state pay no state corporate income tax, according to a report by the Commission on Government Forecasting and Accountability.
That apparently has led to companies wanting to recoup taxes its employees pay. United Stationers, which appeared at the hearing, illustrates the point. It has two incentive packages from the state for its offices in Deerfield and Greenville but can't fully take advantage of those deals. In 2011, the company's incentive packages were worth about $2.6 million, according to the Department of Commerce and Economic Opportunity.
Swiss insurance company Zurich wants an incentive package to relocate its North American headquarters less than two miles from its current location in Schaumburg. It employs about 2,500 people there.
In exchange, Zurich said it would create 250 jobs within five years and retain 1,000 workers in Schaumburg, where it plans to purchase its new North American headquarters building. The company also is working with the village for financial assistance for the move.
Dennis Kerrigan, chief legal officer at Zurich, declined to tell lawmakers at the hearing the value and length of the incentives it is seeking because it is in a "competitive stage" of its negotiation with the state. That frustrated lawmakers who are opposed to making more changes to the tax credit program.
"I can't support this," said Rep. David McSweeney, R-Barrington Hills. "The reason I can't support this is that I don't think we should be in the business of picking winners and losers of multimillion-dollar companies."