Bill Text: IL HB1589 | 2019-2020 | 101st General Assembly | Introduced

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Bill Title: Amends the Tax Increment Allocation Redevelopment Act of the Illinois Municipal Code. Provides that surplus tax revenues may be used to pay for costs of special education, social services, and other costs of a public school district. Provides that for municipalities with a population of over 1,000,000, redevelopment project costs include public school district qualified workers, costs of providing special educational facilities and services, school psychological services, and school social work services, and any surplus balance in the special tax allocation fund at the end of the fiscal year shall be used for these workers, facilities, and services. Removes provisions allowing anticipated redevelopment project costs to be deemed surplus funds.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Introduced - Dead) 2019-03-29 - Rule 19(a) / Re-referred to Rules Committee [HB1589 Detail]

Download: Illinois-2019-HB1589-Introduced.html

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101ST GENERAL ASSEMBLY State of Illinois 2019 and 2020 HB1589 Introduced , by Rep. Sonya M. Harper SYNOPSIS AS INTRODUCED:
65 ILCS 5/11-74.4-2 from Ch. 24, par. 11-74.4-2
65 ILCS 5/11-74.4-3 from Ch. 24, par. 11-74.4-3
65 ILCS 5/11-74.4-5 from Ch. 24, par. 11-74.4-5
65 ILCS 5/11-74.4-7 from Ch. 24, par. 11-74.4-7
65 ILCS 5/11-74.4-8 from Ch. 24, par. 11-74.4-8
65 ILCS 5/11-74.4-8a from Ch. 24, par. 11-74.4-8a
Amends the Tax Increment Allocation Redevelopment Act of the Illinois Municipal Code. Provides that surplus tax revenues may be used to pay for costs of special education, social services, and other costs of a public school district. Provides that for municipalities with a population of over 1,000,000, redevelopment project costs include public school district qualified workers, costs of providing special educational facilities and services, school psychological services, and school social work services, and any surplus balance in the special tax allocation fund at the end of the fiscal year shall be used for these workers, facilities, and services. Removes provisions allowing anticipated redevelopment project costs to be deemed surplus funds.
LRB101 06664 AWJ 51691 b
FISCAL NOTE ACT MAY APPLY HOUSING AFFORDABILITY IMPACT NOTE ACT MAY APPLY
A BILL FOR
HB1589 LRB101 06664 AWJ 51691 b
AN ACT concerning local government.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Illinois Municipal Code is amended by
changing Sections 11-74.4-2, 11-74.4-3, 11-74.4-5, 11-74.4-7,
11-74.4-8, and 11-74.4-8a as follows:
(65 ILCS 5/11-74.4-2) (from Ch. 24, par. 11-74.4-2)
Sec. 11-74.4-2. (a) It is hereby found and declared that
there exist in many municipalities within this State blighted
conservation and industrial park conservation areas, as
defined herein; that the conservation areas are rapidly
deteriorating and declining and may soon become blighted areas
if their decline is not checked; that the stable economic and
physical development of the blighted areas, conservation areas
and industrial park conservation areas is endangered by the
presence of blighting factors as manifested by progressive and
advanced deterioration of structures, by the overuse of housing
and other facilities, by a lack of physical maintenance of
existing structures, by obsolete and inadequate community
facilities and a lack of sound community planning, by obsolete
platting, diversity of ownership, excessive tax and special
assessment delinquencies, by the growth of a large surplus of
workers who lack the skills to meet existing or potential

HB1589 - 2 - LRB101 06664 AWJ 51691 b
employment opportunities or by a combination of these factors;
that as a result of the existence of blighted areas and areas
requiring conservation, there is an excessive and
disproportionate expenditure of public funds, inadequate
public and private investment, unmarketability of property,
growth in delinquencies and crime, and housing and zoning law
violations in such areas together with an abnormal exodus of
families and businesses so that the decline of these areas
impairs the value of private investments and threatens the
sound growth and the tax base of taxing districts in such
areas, and threatens the health, safety, morals, and welfare of
the public and that the industrial park conservation areas
include under-utilized areas which, if developed as industrial
parks, will promote industrial and transportation activities,
thereby reducing the evils attendant upon involuntary
unemployment and enhancing the public health and welfare of
this State.
(b) It is hereby found and declared that in order to
promote and protect the health, safety, morals, and welfare of
the public, that blighted conditions need to be eradicated and
conservation measures instituted, and that redevelopment of
such areas be undertaken; that to remove and alleviate adverse
conditions it is necessary to encourage private investment and
restore and enhance the tax base of the taxing districts in
such areas by the development or redevelopment of project
areas. The eradication of blighted areas and treatment and

HB1589 - 3 - LRB101 06664 AWJ 51691 b
improvement of conservation areas and industrial park
conservation areas by redevelopment projects is hereby
declared to be essential to the public interest.
(c) It is found and declared that the use of incremental
tax revenues derived from the tax rates of various taxing
districts in redevelopment project areas for the payment of
redevelopment project costs is of benefit to said taxing
districts for the reasons that taxing districts located in
redevelopment project areas would not derive the benefits of an
increased assessment base without the benefits of tax increment
financing, all surplus tax revenues are turned over to the
taxing districts in redevelopment project areas or used to pay
for costs of special education, social service, and other costs
of its public school district, and all said districts benefit
from the removal of blighted conditions, the eradication of
conditions requiring conservation measures, and the
development of industrial parks.
(Source: P.A. 84-1090.)
(65 ILCS 5/11-74.4-3) (from Ch. 24, par. 11-74.4-3)
Sec. 11-74.4-3. Definitions. The following terms, wherever
used or referred to in this Division 74.4 shall have the
following respective meanings, unless in any case a different
meaning clearly appears from the context.
(a) For any redevelopment project area that has been
designated pursuant to this Section by an ordinance adopted

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prior to November 1, 1999 (the effective date of Public Act
91-478), "blighted area" shall have the meaning set forth in
this Section prior to that date.
On and after November 1, 1999, "blighted area" means any
improved or vacant area within the boundaries of a
redevelopment project area located within the territorial
limits of the municipality where:
(1) If improved, industrial, commercial, and
residential buildings or improvements are detrimental to
the public safety, health, or welfare because of a
combination of 5 or more of the following factors, each of
which is (i) present, with that presence documented, to a
meaningful extent so that a municipality may reasonably
find that the factor is clearly present within the intent
of the Act and (ii) reasonably distributed throughout the
improved part of the redevelopment project area:
(A) Dilapidation. An advanced state of disrepair
or neglect of necessary repairs to the primary
structural components of buildings or improvements in
such a combination that a documented building
condition analysis determines that major repair is
required or the defects are so serious and so extensive
that the buildings must be removed.
(B) Obsolescence. The condition or process of
falling into disuse. Structures have become ill-suited
for the original use.

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(C) Deterioration. With respect to buildings,
defects including, but not limited to, major defects in
the secondary building components such as doors,
windows, porches, gutters and downspouts, and fascia.
With respect to surface improvements, that the
condition of roadways, alleys, curbs, gutters,
sidewalks, off-street parking, and surface storage
areas evidence deterioration, including, but not
limited to, surface cracking, crumbling, potholes,
depressions, loose paving material, and weeds
protruding through paved surfaces.
(D) Presence of structures below minimum code
standards. All structures that do not meet the
standards of zoning, subdivision, building, fire, and
other governmental codes applicable to property, but
not including housing and property maintenance codes.
(E) Illegal use of individual structures. The use
of structures in violation of applicable federal,
State, or local laws, exclusive of those applicable to
the presence of structures below minimum code
standards.
(F) Excessive vacancies. The presence of buildings
that are unoccupied or under-utilized and that
represent an adverse influence on the area because of
the frequency, extent, or duration of the vacancies.
(G) Lack of ventilation, light, or sanitary

HB1589 - 6 - LRB101 06664 AWJ 51691 b
facilities. The absence of adequate ventilation for
light or air circulation in spaces or rooms without
windows, or that require the removal of dust, odor,
gas, smoke, or other noxious airborne materials.
Inadequate natural light and ventilation means the
absence of skylights or windows for interior spaces or
rooms and improper window sizes and amounts by room
area to window area ratios. Inadequate sanitary
facilities refers to the absence or inadequacy of
garbage storage and enclosure, bathroom facilities,
hot water and kitchens, and structural inadequacies
preventing ingress and egress to and from all rooms and
units within a building.
(H) Inadequate utilities. Underground and overhead
utilities such as storm sewers and storm drainage,
sanitary sewers, water lines, and gas, telephone, and
electrical services that are shown to be inadequate.
Inadequate utilities are those that are: (i) of
insufficient capacity to serve the uses in the
redevelopment project area, (ii) deteriorated,
antiquated, obsolete, or in disrepair, or (iii)
lacking within the redevelopment project area.
(I) Excessive land coverage and overcrowding of
structures and community facilities. The
over-intensive use of property and the crowding of
buildings and accessory facilities onto a site.

HB1589 - 7 - LRB101 06664 AWJ 51691 b
Examples of problem conditions warranting the
designation of an area as one exhibiting excessive land
coverage are: (i) the presence of buildings either
improperly situated on parcels or located on parcels of
inadequate size and shape in relation to present-day
standards of development for health and safety and (ii)
the presence of multiple buildings on a single parcel.
For there to be a finding of excessive land coverage,
these parcels must exhibit one or more of the following
conditions: insufficient provision for light and air
within or around buildings, increased threat of spread
of fire due to the close proximity of buildings, lack
of adequate or proper access to a public right-of-way,
lack of reasonably required off-street parking, or
inadequate provision for loading and service.
(J) Deleterious land use or layout. The existence
of incompatible land-use relationships, buildings
occupied by inappropriate mixed-uses, or uses
considered to be noxious, offensive, or unsuitable for
the surrounding area.
(K) Environmental clean-up. The proposed
redevelopment project area has incurred Illinois
Environmental Protection Agency or United States
Environmental Protection Agency remediation costs for,
or a study conducted by an independent consultant
recognized as having expertise in environmental

HB1589 - 8 - LRB101 06664 AWJ 51691 b
remediation has determined a need for, the clean-up of
hazardous waste, hazardous substances, or underground
storage tanks required by State or federal law,
provided that the remediation costs constitute a
material impediment to the development or
redevelopment of the redevelopment project area.
(L) Lack of community planning. The proposed
redevelopment project area was developed prior to or
without the benefit or guidance of a community plan.
This means that the development occurred prior to the
adoption by the municipality of a comprehensive or
other community plan or that the plan was not followed
at the time of the area's development. This factor must
be documented by evidence of adverse or incompatible
land-use relationships, inadequate street layout,
improper subdivision, parcels of inadequate shape and
size to meet contemporary development standards, or
other evidence demonstrating an absence of effective
community planning.
(M) The total equalized assessed value of the
proposed redevelopment project area has declined for 3
of the last 5 calendar years prior to the year in which
the redevelopment project area is designated or is
increasing at an annual rate that is less than the
balance of the municipality for 3 of the last 5
calendar years for which information is available or is

HB1589 - 9 - LRB101 06664 AWJ 51691 b
increasing at an annual rate that is less than the
Consumer Price Index for All Urban Consumers published
by the United States Department of Labor or successor
agency for 3 of the last 5 calendar years prior to the
year in which the redevelopment project area is
designated.
(2) If vacant, the sound growth of the redevelopment
project area is impaired by a combination of 2 or more of
the following factors, each of which is (i) present, with
that presence documented, to a meaningful extent so that a
municipality may reasonably find that the factor is clearly
present within the intent of the Act and (ii) reasonably
distributed throughout the vacant part of the
redevelopment project area to which it pertains:
(A) Obsolete platting of vacant land that results
in parcels of limited or narrow size or configurations
of parcels of irregular size or shape that would be
difficult to develop on a planned basis and in a manner
compatible with contemporary standards and
requirements, or platting that failed to create
rights-of-ways for streets or alleys or that created
inadequate right-of-way widths for streets, alleys, or
other public rights-of-way or that omitted easements
for public utilities.
(B) Diversity of ownership of parcels of vacant
land sufficient in number to retard or impede the

HB1589 - 10 - LRB101 06664 AWJ 51691 b
ability to assemble the land for development.
(C) Tax and special assessment delinquencies exist
or the property has been the subject of tax sales under
the Property Tax Code within the last 5 years.
(D) Deterioration of structures or site
improvements in neighboring areas adjacent to the
vacant land.
(E) The area has incurred Illinois Environmental
Protection Agency or United States Environmental
Protection Agency remediation costs for, or a study
conducted by an independent consultant recognized as
having expertise in environmental remediation has
determined a need for, the clean-up of hazardous waste,
hazardous substances, or underground storage tanks
required by State or federal law, provided that the
remediation costs constitute a material impediment to
the development or redevelopment of the redevelopment
project area.
(F) The total equalized assessed value of the
proposed redevelopment project area has declined for 3
of the last 5 calendar years prior to the year in which
the redevelopment project area is designated or is
increasing at an annual rate that is less than the
balance of the municipality for 3 of the last 5
calendar years for which information is available or is
increasing at an annual rate that is less than the

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Consumer Price Index for All Urban Consumers published
by the United States Department of Labor or successor
agency for 3 of the last 5 calendar years prior to the
year in which the redevelopment project area is
designated.
(3) If vacant, the sound growth of the redevelopment
project area is impaired by one of the following factors
that (i) is present, with that presence documented, to a
meaningful extent so that a municipality may reasonably
find that the factor is clearly present within the intent
of the Act and (ii) is reasonably distributed throughout
the vacant part of the redevelopment project area to which
it pertains:
(A) The area consists of one or more unused
quarries, mines, or strip mine ponds.
(B) The area consists of unused rail yards, rail
tracks, or railroad rights-of-way.
(C) The area, prior to its designation, is subject
to (i) chronic flooding that adversely impacts on real
property in the area as certified by a registered
professional engineer or appropriate regulatory agency
or (ii) surface water that discharges from all or a
part of the area and contributes to flooding within the
same watershed, but only if the redevelopment project
provides for facilities or improvements to contribute
to the alleviation of all or part of the flooding.

HB1589 - 12 - LRB101 06664 AWJ 51691 b
(D) The area consists of an unused or illegal
disposal site containing earth, stone, building
debris, or similar materials that were removed from
construction, demolition, excavation, or dredge sites.
(E) Prior to November 1, 1999, the area is not less
than 50 nor more than 100 acres and 75% of which is
vacant (notwithstanding that the area has been used for
commercial agricultural purposes within 5 years prior
to the designation of the redevelopment project area),
and the area meets at least one of the factors itemized
in paragraph (1) of this subsection, the area has been
designated as a town or village center by ordinance or
comprehensive plan adopted prior to January 1, 1982,
and the area has not been developed for that designated
purpose.
(F) The area qualified as a blighted improved area
immediately prior to becoming vacant, unless there has
been substantial private investment in the immediately
surrounding area.
(b) For any redevelopment project area that has been
designated pursuant to this Section by an ordinance adopted
prior to November 1, 1999 (the effective date of Public Act
91-478), "conservation area" shall have the meaning set forth
in this Section prior to that date.
On and after November 1, 1999, "conservation area" means
any improved area within the boundaries of a redevelopment

HB1589 - 13 - LRB101 06664 AWJ 51691 b
project area located within the territorial limits of the
municipality in which 50% or more of the structures in the area
have an age of 35 years or more. Such an area is not yet a
blighted area but because of a combination of 3 or more of the
following factors is detrimental to the public safety, health,
morals or welfare and such an area may become a blighted area:
(1) Dilapidation. An advanced state of disrepair or
neglect of necessary repairs to the primary structural
components of buildings or improvements in such a
combination that a documented building condition analysis
determines that major repair is required or the defects are
so serious and so extensive that the buildings must be
removed.
(2) Obsolescence. The condition or process of falling
into disuse. Structures have become ill-suited for the
original use.
(3) Deterioration. With respect to buildings, defects
including, but not limited to, major defects in the
secondary building components such as doors, windows,
porches, gutters and downspouts, and fascia. With respect
to surface improvements, that the condition of roadways,
alleys, curbs, gutters, sidewalks, off-street parking, and
surface storage areas evidence deterioration, including,
but not limited to, surface cracking, crumbling, potholes,
depressions, loose paving material, and weeds protruding
through paved surfaces.

HB1589 - 14 - LRB101 06664 AWJ 51691 b
(4) Presence of structures below minimum code
standards. All structures that do not meet the standards of
zoning, subdivision, building, fire, and other
governmental codes applicable to property, but not
including housing and property maintenance codes.
(5) Illegal use of individual structures. The use of
structures in violation of applicable federal, State, or
local laws, exclusive of those applicable to the presence
of structures below minimum code standards.
(6) Excessive vacancies. The presence of buildings
that are unoccupied or under-utilized and that represent an
adverse influence on the area because of the frequency,
extent, or duration of the vacancies.
(7) Lack of ventilation, light, or sanitary
facilities. The absence of adequate ventilation for light
or air circulation in spaces or rooms without windows, or
that require the removal of dust, odor, gas, smoke, or
other noxious airborne materials. Inadequate natural light
and ventilation means the absence or inadequacy of
skylights or windows for interior spaces or rooms and
improper window sizes and amounts by room area to window
area ratios. Inadequate sanitary facilities refers to the
absence or inadequacy of garbage storage and enclosure,
bathroom facilities, hot water and kitchens, and
structural inadequacies preventing ingress and egress to
and from all rooms and units within a building.

HB1589 - 15 - LRB101 06664 AWJ 51691 b
(8) Inadequate utilities. Underground and overhead
utilities such as storm sewers and storm drainage, sanitary
sewers, water lines, and gas, telephone, and electrical
services that are shown to be inadequate. Inadequate
utilities are those that are: (i) of insufficient capacity
to serve the uses in the redevelopment project area, (ii)
deteriorated, antiquated, obsolete, or in disrepair, or
(iii) lacking within the redevelopment project area.
(9) Excessive land coverage and overcrowding of
structures and community facilities. The over-intensive
use of property and the crowding of buildings and accessory
facilities onto a site. Examples of problem conditions
warranting the designation of an area as one exhibiting
excessive land coverage are: the presence of buildings
either improperly situated on parcels or located on parcels
of inadequate size and shape in relation to present-day
standards of development for health and safety and the
presence of multiple buildings on a single parcel. For
there to be a finding of excessive land coverage, these
parcels must exhibit one or more of the following
conditions: insufficient provision for light and air
within or around buildings, increased threat of spread of
fire due to the close proximity of buildings, lack of
adequate or proper access to a public right-of-way, lack of
reasonably required off-street parking, or inadequate
provision for loading and service.

HB1589 - 16 - LRB101 06664 AWJ 51691 b
(10) Deleterious land use or layout. The existence of
incompatible land-use relationships, buildings occupied by
inappropriate mixed-uses, or uses considered to be
noxious, offensive, or unsuitable for the surrounding
area.
(11) Lack of community planning. The proposed
redevelopment project area was developed prior to or
without the benefit or guidance of a community plan. This
means that the development occurred prior to the adoption
by the municipality of a comprehensive or other community
plan or that the plan was not followed at the time of the
area's development. This factor must be documented by
evidence of adverse or incompatible land-use
relationships, inadequate street layout, improper
subdivision, parcels of inadequate shape and size to meet
contemporary development standards, or other evidence
demonstrating an absence of effective community planning.
(12) The area has incurred Illinois Environmental
Protection Agency or United States Environmental
Protection Agency remediation costs for, or a study
conducted by an independent consultant recognized as
having expertise in environmental remediation has
determined a need for, the clean-up of hazardous waste,
hazardous substances, or underground storage tanks
required by State or federal law, provided that the
remediation costs constitute a material impediment to the

HB1589 - 17 - LRB101 06664 AWJ 51691 b
development or redevelopment of the redevelopment project
area.
(13) The total equalized assessed value of the proposed
redevelopment project area has declined for 3 of the last 5
calendar years for which information is available or is
increasing at an annual rate that is less than the balance
of the municipality for 3 of the last 5 calendar years for
which information is available or is increasing at an
annual rate that is less than the Consumer Price Index for
All Urban Consumers published by the United States
Department of Labor or successor agency for 3 of the last 5
calendar years for which information is available.
(c) "Industrial park" means an area in a blighted or
conservation area suitable for use by any manufacturing,
industrial, research or transportation enterprise, of
facilities to include but not be limited to factories, mills,
processing plants, assembly plants, packing plants,
fabricating plants, industrial distribution centers,
warehouses, repair overhaul or service facilities, freight
terminals, research facilities, test facilities or railroad
facilities.
(d) "Industrial park conservation area" means an area
within the boundaries of a redevelopment project area located
within the territorial limits of a municipality that is a labor
surplus municipality or within 1 1/2 miles of the territorial
limits of a municipality that is a labor surplus municipality

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if the area is annexed to the municipality; which area is zoned
as industrial no later than at the time the municipality by
ordinance designates the redevelopment project area, and which
area includes both vacant land suitable for use as an
industrial park and a blighted area or conservation area
contiguous to such vacant land.
(e) "Labor surplus municipality" means a municipality in
which, at any time during the 6 months before the municipality
by ordinance designates an industrial park conservation area,
the unemployment rate was over 6% and was also 100% or more of
the national average unemployment rate for that same time as
published in the United States Department of Labor Bureau of
Labor Statistics publication entitled "The Employment
Situation" or its successor publication. For the purpose of
this subsection, if unemployment rate statistics for the
municipality are not available, the unemployment rate in the
municipality shall be deemed to be the same as the unemployment
rate in the principal county in which the municipality is
located.
(f) "Municipality" shall mean a city, village,
incorporated town, or a township that is located in the
unincorporated portion of a county with 3 million or more
inhabitants, if the county adopted an ordinance that approved
the township's redevelopment plan.
(g) "Initial Sales Tax Amounts" means the amount of taxes
paid under the Retailers' Occupation Tax Act, Use Tax Act,

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Service Use Tax Act, the Service Occupation Tax Act, the
Municipal Retailers' Occupation Tax Act, and the Municipal
Service Occupation Tax Act by retailers and servicemen on
transactions at places located in a State Sales Tax Boundary
during the calendar year 1985.
(g-1) "Revised Initial Sales Tax Amounts" means the amount
of taxes paid under the Retailers' Occupation Tax Act, Use Tax
Act, Service Use Tax Act, the Service Occupation Tax Act, the
Municipal Retailers' Occupation Tax Act, and the Municipal
Service Occupation Tax Act by retailers and servicemen on
transactions at places located within the State Sales Tax
Boundary revised pursuant to Section 11-74.4-8a(9) of this Act.
(h) "Municipal Sales Tax Increment" means an amount equal
to the increase in the aggregate amount of taxes paid to a
municipality from the Local Government Tax Fund arising from
sales by retailers and servicemen within the redevelopment
project area or State Sales Tax Boundary, as the case may be,
for as long as the redevelopment project area or State Sales
Tax Boundary, as the case may be, exist over and above the
aggregate amount of taxes as certified by the Illinois
Department of Revenue and paid under the Municipal Retailers'
Occupation Tax Act and the Municipal Service Occupation Tax Act
by retailers and servicemen, on transactions at places of
business located in the redevelopment project area or State
Sales Tax Boundary, as the case may be, during the base year
which shall be the calendar year immediately prior to the year

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in which the municipality adopted tax increment allocation
financing. For purposes of computing the aggregate amount of
such taxes for base years occurring prior to 1985, the
Department of Revenue shall determine the Initial Sales Tax
Amounts for such taxes and deduct therefrom an amount equal to
4% of the aggregate amount of taxes per year for each year the
base year is prior to 1985, but not to exceed a total deduction
of 12%. The amount so determined shall be known as the
"Adjusted Initial Sales Tax Amounts". For purposes of
determining the Municipal Sales Tax Increment, the Department
of Revenue shall for each period subtract from the amount paid
to the municipality from the Local Government Tax Fund arising
from sales by retailers and servicemen on transactions located
in the redevelopment project area or the State Sales Tax
Boundary, as the case may be, the certified Initial Sales Tax
Amounts, the Adjusted Initial Sales Tax Amounts or the Revised
Initial Sales Tax Amounts for the Municipal Retailers'
Occupation Tax Act and the Municipal Service Occupation Tax
Act. For the State Fiscal Year 1989, this calculation shall be
made by utilizing the calendar year 1987 to determine the tax
amounts received. For the State Fiscal Year 1990, this
calculation shall be made by utilizing the period from January
1, 1988, until September 30, 1988, to determine the tax amounts
received from retailers and servicemen pursuant to the
Municipal Retailers' Occupation Tax and the Municipal Service
Occupation Tax Act, which shall have deducted therefrom

HB1589 - 21 - LRB101 06664 AWJ 51691 b
nine-twelfths of the certified Initial Sales Tax Amounts, the
Adjusted Initial Sales Tax Amounts or the Revised Initial Sales
Tax Amounts as appropriate. For the State Fiscal Year 1991,
this calculation shall be made by utilizing the period from
October 1, 1988, to June 30, 1989, to determine the tax amounts
received from retailers and servicemen pursuant to the
Municipal Retailers' Occupation Tax and the Municipal Service
Occupation Tax Act which shall have deducted therefrom
nine-twelfths of the certified Initial Sales Tax Amounts,
Adjusted Initial Sales Tax Amounts or the Revised Initial Sales
Tax Amounts as appropriate. For every State Fiscal Year
thereafter, the applicable period shall be the 12 months
beginning July 1 and ending June 30 to determine the tax
amounts received which shall have deducted therefrom the
certified Initial Sales Tax Amounts, the Adjusted Initial Sales
Tax Amounts or the Revised Initial Sales Tax Amounts, as the
case may be.
(i) "Net State Sales Tax Increment" means the sum of the
following: (a) 80% of the first $100,000 of State Sales Tax
Increment annually generated within a State Sales Tax Boundary;
(b) 60% of the amount in excess of $100,000 but not exceeding
$500,000 of State Sales Tax Increment annually generated within
a State Sales Tax Boundary; and (c) 40% of all amounts in
excess of $500,000 of State Sales Tax Increment annually
generated within a State Sales Tax Boundary. If, however, a
municipality established a tax increment financing district in

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a county with a population in excess of 3,000,000 before
January 1, 1986, and the municipality entered into a contract
or issued bonds after January 1, 1986, but before December 31,
1986, to finance redevelopment project costs within a State
Sales Tax Boundary, then the Net State Sales Tax Increment
means, for the fiscal years beginning July 1, 1990, and July 1,
1991, 100% of the State Sales Tax Increment annually generated
within a State Sales Tax Boundary; and notwithstanding any
other provision of this Act, for those fiscal years the
Department of Revenue shall distribute to those municipalities
100% of their Net State Sales Tax Increment before any
distribution to any other municipality and regardless of
whether or not those other municipalities will receive 100% of
their Net State Sales Tax Increment. For Fiscal Year 1999, and
every year thereafter until the year 2007, for any municipality
that has not entered into a contract or has not issued bonds
prior to June 1, 1988 to finance redevelopment project costs
within a State Sales Tax Boundary, the Net State Sales Tax
Increment shall be calculated as follows: By multiplying the
Net State Sales Tax Increment by 90% in the State Fiscal Year
1999; 80% in the State Fiscal Year 2000; 70% in the State
Fiscal Year 2001; 60% in the State Fiscal Year 2002; 50% in the
State Fiscal Year 2003; 40% in the State Fiscal Year 2004; 30%
in the State Fiscal Year 2005; 20% in the State Fiscal Year
2006; and 10% in the State Fiscal Year 2007. No payment shall
be made for State Fiscal Year 2008 and thereafter.

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Municipalities that issued bonds in connection with a
redevelopment project in a redevelopment project area within
the State Sales Tax Boundary prior to July 29, 1991, or that
entered into contracts in connection with a redevelopment
project in a redevelopment project area before June 1, 1988,
shall continue to receive their proportional share of the
Illinois Tax Increment Fund distribution until the date on
which the redevelopment project is completed or terminated. If,
however, a municipality that issued bonds in connection with a
redevelopment project in a redevelopment project area within
the State Sales Tax Boundary prior to July 29, 1991 retires the
bonds prior to June 30, 2007 or a municipality that entered
into contracts in connection with a redevelopment project in a
redevelopment project area before June 1, 1988 completes the
contracts prior to June 30, 2007, then so long as the
redevelopment project is not completed or is not terminated,
the Net State Sales Tax Increment shall be calculated,
beginning on the date on which the bonds are retired or the
contracts are completed, as follows: By multiplying the Net
State Sales Tax Increment by 60% in the State Fiscal Year 2002;
50% in the State Fiscal Year 2003; 40% in the State Fiscal Year
2004; 30% in the State Fiscal Year 2005; 20% in the State
Fiscal Year 2006; and 10% in the State Fiscal Year 2007. No
payment shall be made for State Fiscal Year 2008 and
thereafter. Refunding of any bonds issued prior to July 29,
1991, shall not alter the Net State Sales Tax Increment.

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(j) "State Utility Tax Increment Amount" means an amount
equal to the aggregate increase in State electric and gas tax
charges imposed on owners and tenants, other than residential
customers, of properties located within the redevelopment
project area under Section 9-222 of the Public Utilities Act,
over and above the aggregate of such charges as certified by
the Department of Revenue and paid by owners and tenants, other
than residential customers, of properties within the
redevelopment project area during the base year, which shall be
the calendar year immediately prior to the year of the adoption
of the ordinance authorizing tax increment allocation
financing.
(k) "Net State Utility Tax Increment" means the sum of the
following: (a) 80% of the first $100,000 of State Utility Tax
Increment annually generated by a redevelopment project area;
(b) 60% of the amount in excess of $100,000 but not exceeding
$500,000 of the State Utility Tax Increment annually generated
by a redevelopment project area; and (c) 40% of all amounts in
excess of $500,000 of State Utility Tax Increment annually
generated by a redevelopment project area. For the State Fiscal
Year 1999, and every year thereafter until the year 2007, for
any municipality that has not entered into a contract or has
not issued bonds prior to June 1, 1988 to finance redevelopment
project costs within a redevelopment project area, the Net
State Utility Tax Increment shall be calculated as follows: By
multiplying the Net State Utility Tax Increment by 90% in the

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State Fiscal Year 1999; 80% in the State Fiscal Year 2000; 70%
in the State Fiscal Year 2001; 60% in the State Fiscal Year
2002; 50% in the State Fiscal Year 2003; 40% in the State
Fiscal Year 2004; 30% in the State Fiscal Year 2005; 20% in the
State Fiscal Year 2006; and 10% in the State Fiscal Year 2007.
No payment shall be made for the State Fiscal Year 2008 and
thereafter.
Municipalities that issue bonds in connection with the
redevelopment project during the period from June 1, 1988 until
3 years after the effective date of this Amendatory Act of 1988
shall receive the Net State Utility Tax Increment, subject to
appropriation, for 15 State Fiscal Years after the issuance of
such bonds. For the 16th through the 20th State Fiscal Years
after issuance of the bonds, the Net State Utility Tax
Increment shall be calculated as follows: By multiplying the
Net State Utility Tax Increment by 90% in year 16; 80% in year
17; 70% in year 18; 60% in year 19; and 50% in year 20.
Refunding of any bonds issued prior to June 1, 1988, shall not
alter the revised Net State Utility Tax Increment payments set
forth above.
(l) "Obligations" mean bonds, loans, debentures, notes,
special certificates or other evidence of indebtedness issued
by the municipality to carry out a redevelopment project or to
refund outstanding obligations.
(m) "Payment in lieu of taxes" means those estimated tax
revenues from real property in a redevelopment project area

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derived from real property that has been acquired by a
municipality which according to the redevelopment project or
plan is to be used for a private use which taxing districts
would have received had a municipality not acquired the real
property and adopted tax increment allocation financing and
which would result from levies made after the time of the
adoption of tax increment allocation financing to the time the
current equalized value of real property in the redevelopment
project area exceeds the total initial equalized value of real
property in said area.
(n) "Redevelopment plan" means the comprehensive program
of the municipality for development or redevelopment intended
by the payment of redevelopment project costs to reduce or
eliminate those conditions the existence of which qualified the
redevelopment project area as a "blighted area" or
"conservation area" or combination thereof or "industrial park
conservation area," and thereby to enhance the tax bases of the
taxing districts which extend into the redevelopment project
area, provided that, with respect to redevelopment project
areas described in subsections (p-1) and (p-2), "redevelopment
plan" means the comprehensive program of the affected
municipality for the development of qualifying transit
facilities. On and after November 1, 1999 (the effective date
of Public Act 91-478), no redevelopment plan may be approved or
amended that includes the development of vacant land (i) with a
golf course and related clubhouse and other facilities or (ii)

HB1589 - 27 - LRB101 06664 AWJ 51691 b
designated by federal, State, county, or municipal government
as public land for outdoor recreational activities or for
nature preserves and used for that purpose within 5 years prior
to the adoption of the redevelopment plan. For the purpose of
this subsection, "recreational activities" is limited to mean
camping and hunting. Each redevelopment plan shall set forth in
writing the program to be undertaken to accomplish the
objectives and shall include but not be limited to:
(A) an itemized list of estimated redevelopment
project costs;
(B) evidence indicating that the redevelopment project
area on the whole has not been subject to growth and
development through investment by private enterprise,
provided that such evidence shall not be required for any
redevelopment project area located within a transit
facility improvement area established pursuant to Section
11-74.4-3.3;
(C) an assessment of any financial impact of the
redevelopment project area on or any increased demand for
services from any taxing district affected by the plan and
any program to address such financial impact or increased
demand;
(D) the sources of funds to pay costs;
(E) the nature and term of the obligations to be
issued;
(F) the most recent equalized assessed valuation of the

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redevelopment project area;
(G) an estimate as to the equalized assessed valuation
after redevelopment and the general land uses to apply in
the redevelopment project area;
(H) a commitment to fair employment practices and an
affirmative action plan;
(I) if it concerns an industrial park conservation
area, the plan shall also include a general description of
any proposed developer, user and tenant of any property, a
description of the type, structure and general character of
the facilities to be developed, a description of the type,
class and number of new employees to be employed in the
operation of the facilities to be developed; and
(J) if property is to be annexed to the municipality,
the plan shall include the terms of the annexation
agreement.
The provisions of items (B) and (C) of this subsection (n)
shall not apply to a municipality that before March 14, 1994
(the effective date of Public Act 88-537) had fixed, either by
its corporate authorities or by a commission designated under
subsection (k) of Section 11-74.4-4, a time and place for a
public hearing as required by subsection (a) of Section
11-74.4-5. No redevelopment plan shall be adopted unless a
municipality complies with all of the following requirements:
(1) The municipality finds that the redevelopment
project area on the whole has not been subject to growth

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and development through investment by private enterprise
and would not reasonably be anticipated to be developed
without the adoption of the redevelopment plan, provided,
however, that such a finding shall not be required with
respect to any redevelopment project area located within a
transit facility improvement area established pursuant to
Section 11-74.4-3.3.
(2) The municipality finds that the redevelopment plan
and project conform to the comprehensive plan for the
development of the municipality as a whole, or, for
municipalities with a population of 100,000 or more,
regardless of when the redevelopment plan and project was
adopted, the redevelopment plan and project either: (i)
conforms to the strategic economic development or
redevelopment plan issued by the designated planning
authority of the municipality, or (ii) includes land uses
that have been approved by the planning commission of the
municipality.
(3) The redevelopment plan establishes the estimated
dates of completion of the redevelopment project and
retirement of obligations issued to finance redevelopment
project costs. Those dates may not be later than the dates
set forth under Section 11-74.4-3.5.
A municipality may by municipal ordinance amend an
existing redevelopment plan to conform to this paragraph
(3) as amended by Public Act 91-478, which municipal

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ordinance may be adopted without further hearing or notice
and without complying with the procedures provided in this
Act pertaining to an amendment to or the initial approval
of a redevelopment plan and project and designation of a
redevelopment project area.
(3.5) The municipality finds, in the case of an
industrial park conservation area, also that the
municipality is a labor surplus municipality and that the
implementation of the redevelopment plan will reduce
unemployment, create new jobs and by the provision of new
facilities enhance the tax base of the taxing districts
that extend into the redevelopment project area.
(4) If any incremental revenues are being utilized
under Section 8(a)(1) or 8(a)(2) of this Act in
redevelopment project areas approved by ordinance after
January 1, 1986, the municipality finds: (a) that the
redevelopment project area would not reasonably be
developed without the use of such incremental revenues, and
(b) that such incremental revenues will be exclusively
utilized for the development of the redevelopment project
area.
(5) If: (a) the redevelopment plan will not result in
displacement of residents from 10 or more inhabited
residential units, and the municipality certifies in the
plan that such displacement will not result from the plan;
or (b) the redevelopment plan is for a redevelopment

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project area located within a transit facility improvement
area established pursuant to Section 11-74.4-3.3, and the
applicable project is subject to the process for evaluation
of environmental effects under the National Environmental
Policy Act of 1969, 42 U.S.C. 4321 et seq., then a housing
impact study need not be performed. If, however, the
redevelopment plan would result in the displacement of
residents from 10 or more inhabited residential units, or
if the redevelopment project area contains 75 or more
inhabited residential units and no certification is made,
then the municipality shall prepare, as part of the
separate feasibility report required by subsection (a) of
Section 11-74.4-5, a housing impact study.
Part I of the housing impact study shall include (i)
data as to whether the residential units are single family
or multi-family units, (ii) the number and type of rooms
within the units, if that information is available, (iii)
whether the units are inhabited or uninhabited, as
determined not less than 45 days before the date that the
ordinance or resolution required by subsection (a) of
Section 11-74.4-5 is passed, and (iv) data as to the racial
and ethnic composition of the residents in the inhabited
residential units. The data requirement as to the racial
and ethnic composition of the residents in the inhabited
residential units shall be deemed to be fully satisfied by
data from the most recent federal census.

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Part II of the housing impact study shall identify the
inhabited residential units in the proposed redevelopment
project area that are to be or may be removed. If inhabited
residential units are to be removed, then the housing
impact study shall identify (i) the number and location of
those units that will or may be removed, (ii) the
municipality's plans for relocation assistance for those
residents in the proposed redevelopment project area whose
residences are to be removed, (iii) the availability of
replacement housing for those residents whose residences
are to be removed, and shall identify the type, location,
and cost of the housing, and (iv) the type and extent of
relocation assistance to be provided.
(6) On and after November 1, 1999, the housing impact
study required by paragraph (5) shall be incorporated in
the redevelopment plan for the redevelopment project area.
(7) On and after November 1, 1999, no redevelopment
plan shall be adopted, nor an existing plan amended, nor
shall residential housing that is occupied by households of
low-income and very low-income persons in currently
existing redevelopment project areas be removed after
November 1, 1999 unless the redevelopment plan provides,
with respect to inhabited housing units that are to be
removed for households of low-income and very low-income
persons, affordable housing and relocation assistance not
less than that which would be provided under the federal

HB1589 - 33 - LRB101 06664 AWJ 51691 b
Uniform Relocation Assistance and Real Property
Acquisition Policies Act of 1970 and the regulations under
that Act, including the eligibility criteria. Affordable
housing may be either existing or newly constructed
housing. For purposes of this paragraph (7), "low-income
households", "very low-income households", and "affordable
housing" have the meanings set forth in the Illinois
Affordable Housing Act. The municipality shall make a good
faith effort to ensure that this affordable housing is
located in or near the redevelopment project area within
the municipality.
(8) On and after November 1, 1999, if, after the
adoption of the redevelopment plan for the redevelopment
project area, any municipality desires to amend its
redevelopment plan to remove more inhabited residential
units than specified in its original redevelopment plan,
that change shall be made in accordance with the procedures
in subsection (c) of Section 11-74.4-5.
(9) For redevelopment project areas designated prior
to November 1, 1999, the redevelopment plan may be amended
without further joint review board meeting or hearing,
provided that the municipality shall give notice of any
such changes by mail to each affected taxing district and
registrant on the interested party registry, to authorize
the municipality to expend tax increment revenues for
redevelopment project costs defined by paragraphs (5) and

HB1589 - 34 - LRB101 06664 AWJ 51691 b
(7.5), subparagraphs (E) and (F) of paragraph (11), and
paragraph (11.5) of subsection (q) of Section 11-74.4-3, so
long as the changes do not increase the total estimated
redevelopment project costs set out in the redevelopment
plan by more than 5% after adjustment for inflation from
the date the plan was adopted.
(o) "Redevelopment project" means any public and private
development project in furtherance of the objectives of a
redevelopment plan. On and after November 1, 1999 (the
effective date of Public Act 91-478), no redevelopment plan may
be approved or amended that includes the development of vacant
land (i) with a golf course and related clubhouse and other
facilities or (ii) designated by federal, State, county, or
municipal government as public land for outdoor recreational
activities or for nature preserves and used for that purpose
within 5 years prior to the adoption of the redevelopment plan.
For the purpose of this subsection, "recreational activities"
is limited to mean camping and hunting.
(p) "Redevelopment project area" means an area designated
by the municipality, which is not less in the aggregate than 1
1/2 acres and in respect to which the municipality has made a
finding that there exist conditions which cause the area to be
classified as an industrial park conservation area or a
blighted area or a conservation area, or a combination of both
blighted areas and conservation areas.
(p-1) Notwithstanding any provision of this Act to the

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contrary, on and after August 25, 2009 (the effective date of
Public Act 96-680), a redevelopment project area may include
areas within a one-half mile radius of an existing or proposed
Regional Transportation Authority Suburban Transit Access
Route (STAR Line) station without a finding that the area is
classified as an industrial park conservation area, a blighted
area, a conservation area, or a combination thereof, but only
if the municipality receives unanimous consent from the joint
review board created to review the proposed redevelopment
project area.
(p-2) Notwithstanding any provision of this Act to the
contrary, on and after the effective date of this amendatory
Act of the 99th General Assembly, a redevelopment project area
may include areas within a transit facility improvement area
that has been established pursuant to Section 11-74.4-3.3
without a finding that the area is classified as an industrial
park conservation area, a blighted area, a conservation area,
or any combination thereof.
(q) "Redevelopment project costs", except for
redevelopment project areas created pursuant to subsection
(p-1) or (p-2), means and includes the sum total of all
reasonable or necessary costs incurred or estimated to be
incurred, and any such costs incidental to a redevelopment plan
and a redevelopment project. Such costs include, without
limitation, the following:
(1) Costs of studies, surveys, development of plans,

HB1589 - 36 - LRB101 06664 AWJ 51691 b
and specifications, implementation and administration of
the redevelopment plan including but not limited to staff
and professional service costs for architectural,
engineering, legal, financial, planning or other services,
provided however that no charges for professional services
may be based on a percentage of the tax increment
collected; except that on and after November 1, 1999 (the
effective date of Public Act 91-478), no contracts for
professional services, excluding architectural and
engineering services, may be entered into if the terms of
the contract extend beyond a period of 3 years. In
addition, "redevelopment project costs" shall not include
lobbying expenses. After consultation with the
municipality, each tax increment consultant or advisor to a
municipality that plans to designate or has designated a
redevelopment project area shall inform the municipality
in writing of any contracts that the consultant or advisor
has entered into with entities or individuals that have
received, or are receiving, payments financed by tax
increment revenues produced by the redevelopment project
area with respect to which the consultant or advisor has
performed, or will be performing, service for the
municipality. This requirement shall be satisfied by the
consultant or advisor before the commencement of services
for the municipality and thereafter whenever any other
contracts with those individuals or entities are executed

HB1589 - 37 - LRB101 06664 AWJ 51691 b
by the consultant or advisor;
(1.5) After July 1, 1999, annual administrative costs
shall not include general overhead or administrative costs
of the municipality that would still have been incurred by
the municipality if the municipality had not designated a
redevelopment project area or approved a redevelopment
plan;
(1.6) The cost of marketing sites within the
redevelopment project area to prospective businesses,
developers, and investors;
(2) Property assembly costs, including but not limited
to acquisition of land and other property, real or
personal, or rights or interests therein, demolition of
buildings, site preparation, site improvements that serve
as an engineered barrier addressing ground level or below
ground environmental contamination, including, but not
limited to parking lots and other concrete or asphalt
barriers, and the clearing and grading of land;
(3) Costs of rehabilitation, reconstruction or repair
or remodeling of existing public or private buildings,
fixtures, and leasehold improvements; and the cost of
replacing an existing public building if pursuant to the
implementation of a redevelopment project the existing
public building is to be demolished to use the site for
private investment or devoted to a different use requiring
private investment; including any direct or indirect costs

HB1589 - 38 - LRB101 06664 AWJ 51691 b
relating to Green Globes or LEED certified construction
elements or construction elements with an equivalent
certification;
(4) Costs of the construction of public works or
improvements, including any direct or indirect costs
relating to Green Globes or LEED certified construction
elements or construction elements with an equivalent
certification, except that on and after November 1, 1999,
redevelopment project costs shall not include the cost of
constructing a new municipal public building principally
used to provide offices, storage space, or conference
facilities or vehicle storage, maintenance, or repair for
administrative, public safety, or public works personnel
and that is not intended to replace an existing public
building as provided under paragraph (3) of subsection (q)
of Section 11-74.4-3 unless either (i) the construction of
the new municipal building implements a redevelopment
project that was included in a redevelopment plan that was
adopted by the municipality prior to November 1, 1999, (ii)
the municipality makes a reasonable determination in the
redevelopment plan, supported by information that provides
the basis for that determination, that the new municipal
building is required to meet an increase in the need for
public safety purposes anticipated to result from the
implementation of the redevelopment plan, or (iii) the new
municipal public building is for the storage, maintenance,

HB1589 - 39 - LRB101 06664 AWJ 51691 b
or repair of transit vehicles and is located in a transit
facility improvement area that has been established
pursuant to Section 11-74.4-3.3;
(5) Costs of job training and retraining projects,
including the cost of "welfare to work" programs
implemented by businesses located within the redevelopment
project area;
(6) Financing costs, including but not limited to all
necessary and incidental expenses related to the issuance
of obligations and which may include payment of interest on
any obligations issued hereunder including interest
accruing during the estimated period of construction of any
redevelopment project for which such obligations are
issued and for not exceeding 36 months thereafter and
including reasonable reserves related thereto;
(7) To the extent the municipality by written agreement
accepts and approves the same, all or a portion of a taxing
district's capital costs resulting from the redevelopment
project necessarily incurred or to be incurred within a
taxing district in furtherance of the objectives of the
redevelopment plan and project;
(7.5) For redevelopment project areas designated (or
redevelopment project areas amended to add or increase the
number of tax-increment-financing assisted housing units)
on or after November 1, 1999, an elementary, secondary, or
unit school district's increased costs attributable to

HB1589 - 40 - LRB101 06664 AWJ 51691 b
assisted housing units located within the redevelopment
project area for which the developer or redeveloper
receives financial assistance through an agreement with
the municipality or because the municipality incurs the
cost of necessary infrastructure improvements within the
boundaries of the assisted housing sites necessary for the
completion of that housing as authorized by this Act, and
which costs shall be paid by the municipality from the
Special Tax Allocation Fund when the tax increment revenue
is received as a result of the assisted housing units and
shall be calculated annually as follows:
(A) for foundation districts, excluding any school
district in a municipality with a population in excess
of 1,000,000, by multiplying the district's increase
in attendance resulting from the net increase in new
students enrolled in that school district who reside in
housing units within the redevelopment project area
that have received financial assistance through an
agreement with the municipality or because the
municipality incurs the cost of necessary
infrastructure improvements within the boundaries of
the housing sites necessary for the completion of that
housing as authorized by this Act since the designation
of the redevelopment project area by the most recently
available per capita tuition cost as defined in Section
10-20.12a of the School Code less any increase in

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general State aid as defined in Section 18-8.05 of the
School Code or evidence-based funding as defined in
Section 18-8.15 of the School Code attributable to
these added new students subject to the following
annual limitations:
(i) for unit school districts with a district
average 1995-96 Per Capita Tuition Charge of less
than $5,900, no more than 25% of the total amount
of property tax increment revenue produced by
those housing units that have received tax
increment finance assistance under this Act;
(ii) for elementary school districts with a
district average 1995-96 Per Capita Tuition Charge
of less than $5,900, no more than 17% of the total
amount of property tax increment revenue produced
by those housing units that have received tax
increment finance assistance under this Act; and
(iii) for secondary school districts with a
district average 1995-96 Per Capita Tuition Charge
of less than $5,900, no more than 8% of the total
amount of property tax increment revenue produced
by those housing units that have received tax
increment finance assistance under this Act.
(B) For alternate method districts, flat grant
districts, and foundation districts with a district
average 1995-96 Per Capita Tuition Charge equal to or

HB1589 - 42 - LRB101 06664 AWJ 51691 b
more than $5,900, excluding any school district with a
population in excess of 1,000,000, by multiplying the
district's increase in attendance resulting from the
net increase in new students enrolled in that school
district who reside in housing units within the
redevelopment project area that have received
financial assistance through an agreement with the
municipality or because the municipality incurs the
cost of necessary infrastructure improvements within
the boundaries of the housing sites necessary for the
completion of that housing as authorized by this Act
since the designation of the redevelopment project
area by the most recently available per capita tuition
cost as defined in Section 10-20.12a of the School Code
less any increase in general state aid as defined in
Section 18-8.05 of the School Code or evidence-based
funding as defined in Section 18-8.15 of the School
Code attributable to these added new students subject
to the following annual limitations:
(i) for unit school districts, no more than 40%
of the total amount of property tax increment
revenue produced by those housing units that have
received tax increment finance assistance under
this Act;
(ii) for elementary school districts, no more
than 27% of the total amount of property tax

HB1589 - 43 - LRB101 06664 AWJ 51691 b
increment revenue produced by those housing units
that have received tax increment finance
assistance under this Act; and
(iii) for secondary school districts, no more
than 13% of the total amount of property tax
increment revenue produced by those housing units
that have received tax increment finance
assistance under this Act.
(C) For any school district in a municipality with
a population in excess of 1,000,000, the following
restrictions shall apply to the reimbursement of
increased costs under this paragraph (7.5):
(i) no increased costs shall be reimbursed
unless the school district certifies that each of
the schools affected by the assisted housing
project is at or over its student capacity;
(ii) the amount reimbursable shall be reduced
by the value of any land donated to the school
district by the municipality or developer, and by
the value of any physical improvements made to the
schools by the municipality or developer; and
(iii) the amount reimbursed may not affect
amounts otherwise obligated by the terms of any
bonds, notes, or other funding instruments, or the
terms of any redevelopment agreement.
Any school district seeking payment under this

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paragraph (7.5) shall, after July 1 and before
September 30 of each year, provide the municipality
with reasonable evidence to support its claim for
reimbursement before the municipality shall be
required to approve or make the payment to the school
district. If the school district fails to provide the
information during this period in any year, it shall
forfeit any claim to reimbursement for that year.
School districts may adopt a resolution waiving the
right to all or a portion of the reimbursement
otherwise required by this paragraph (7.5). By
acceptance of this reimbursement the school district
waives the right to directly or indirectly set aside,
modify, or contest in any manner the establishment of
the redevelopment project area or projects;
(7.7) For redevelopment project areas designated (or
redevelopment project areas amended to add or increase the
number of tax-increment-financing assisted housing units)
on or after January 1, 2005 (the effective date of Public
Act 93-961), a public library district's increased costs
attributable to assisted housing units located within the
redevelopment project area for which the developer or
redeveloper receives financial assistance through an
agreement with the municipality or because the
municipality incurs the cost of necessary infrastructure
improvements within the boundaries of the assisted housing

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sites necessary for the completion of that housing as
authorized by this Act shall be paid to the library
district by the municipality from the Special Tax
Allocation Fund when the tax increment revenue is received
as a result of the assisted housing units. This paragraph
(7.7) applies only if (i) the library district is located
in a county that is subject to the Property Tax Extension
Limitation Law or (ii) the library district is not located
in a county that is subject to the Property Tax Extension
Limitation Law but the district is prohibited by any other
law from increasing its tax levy rate without a prior voter
referendum.
The amount paid to a library district under this
paragraph (7.7) shall be calculated by multiplying (i) the
net increase in the number of persons eligible to obtain a
library card in that district who reside in housing units
within the redevelopment project area that have received
financial assistance through an agreement with the
municipality or because the municipality incurs the cost of
necessary infrastructure improvements within the
boundaries of the housing sites necessary for the
completion of that housing as authorized by this Act since
the designation of the redevelopment project area by (ii)
the per-patron cost of providing library services so long
as it does not exceed $120. The per-patron cost shall be
the Total Operating Expenditures Per Capita for the library

HB1589 - 46 - LRB101 06664 AWJ 51691 b
in the previous fiscal year. The municipality may deduct
from the amount that it must pay to a library district
under this paragraph any amount that it has voluntarily
paid to the library district from the tax increment
revenue. The amount paid to a library district under this
paragraph (7.7) shall be no more than 2% of the amount
produced by the assisted housing units and deposited into
the Special Tax Allocation Fund.
A library district is not eligible for any payment
under this paragraph (7.7) unless the library district has
experienced an increase in the number of patrons from the
municipality that created the tax-increment-financing
district since the designation of the redevelopment
project area.
Any library district seeking payment under this
paragraph (7.7) shall, after July 1 and before September 30
of each year, provide the municipality with convincing
evidence to support its claim for reimbursement before the
municipality shall be required to approve or make the
payment to the library district. If the library district
fails to provide the information during this period in any
year, it shall forfeit any claim to reimbursement for that
year. Library districts may adopt a resolution waiving the
right to all or a portion of the reimbursement otherwise
required by this paragraph (7.7). By acceptance of such
reimbursement, the library district shall forfeit any

HB1589 - 47 - LRB101 06664 AWJ 51691 b
right to directly or indirectly set aside, modify, or
contest in any manner whatsoever the establishment of the
redevelopment project area or projects;
(8) Relocation costs to the extent that a municipality
determines that relocation costs shall be paid or is
required to make payment of relocation costs by federal or
State law or in order to satisfy subparagraph (7) of
subsection (n);
(9) Payment in lieu of taxes;
(10) Costs of job training, retraining, advanced
vocational education or career education, including but
not limited to courses in occupational, semi-technical or
technical fields leading directly to employment, incurred
by one or more taxing districts, provided that such costs
(i) are related to the establishment and maintenance of
additional job training, advanced vocational education or
career education programs for persons employed or to be
employed by employers located in a redevelopment project
area; and (ii) when incurred by a taxing district or taxing
districts other than the municipality, are set forth in a
written agreement by or among the municipality and the
taxing district or taxing districts, which agreement
describes the program to be undertaken, including but not
limited to the number of employees to be trained, a
description of the training and services to be provided,
the number and type of positions available or to be

HB1589 - 48 - LRB101 06664 AWJ 51691 b
available, itemized costs of the program and sources of
funds to pay for the same, and the term of the agreement.
Such costs include, specifically, the payment by community
college districts of costs pursuant to Sections 3-37, 3-38,
3-40 and 3-40.1 of the Public Community College Act and by
school districts of costs pursuant to Sections 10-22.20a
and 10-23.3a of the School Code;
(11) Interest cost incurred by a redeveloper related to
the construction, renovation or rehabilitation of a
redevelopment project provided that:
(A) such costs are to be paid directly from the
special tax allocation fund established pursuant to
this Act;
(B) such payments in any one year may not exceed
30% of the annual interest costs incurred by the
redeveloper with regard to the redevelopment project
during that year;
(C) if there are not sufficient funds available in
the special tax allocation fund to make the payment
pursuant to this paragraph (11) then the amounts so due
shall accrue and be payable when sufficient funds are
available in the special tax allocation fund;
(D) the total of such interest payments paid
pursuant to this Act may not exceed 30% of the total
(i) cost paid or incurred by the redeveloper for the
redevelopment project plus (ii) redevelopment project

HB1589 - 49 - LRB101 06664 AWJ 51691 b
costs excluding any property assembly costs and any
relocation costs incurred by a municipality pursuant
to this Act;
(E) the cost limits set forth in subparagraphs (B)
and (D) of paragraph (11) shall be modified for the
financing of rehabilitated or new housing units for
low-income households and very low-income households,
as defined in Section 3 of the Illinois Affordable
Housing Act. The percentage of 75% shall be substituted
for 30% in subparagraphs (B) and (D) of paragraph (11);
and
(F) instead of the eligible costs provided by
subparagraphs (B) and (D) of paragraph (11), as
modified by this subparagraph, and notwithstanding any
other provisions of this Act to the contrary, the
municipality may pay from tax increment revenues up to
50% of the cost of construction of new housing units to
be occupied by low-income households and very
low-income households as defined in Section 3 of the
Illinois Affordable Housing Act. The cost of
construction of those units may be derived from the
proceeds of bonds issued by the municipality under this
Act or other constitutional or statutory authority or
from other sources of municipal revenue that may be
reimbursed from tax increment revenues or the proceeds
of bonds issued to finance the construction of that

HB1589 - 50 - LRB101 06664 AWJ 51691 b
housing.
The eligible costs provided under this
subparagraph (F) of paragraph (11) shall be an eligible
cost for the construction, renovation, and
rehabilitation of all low and very low-income housing
units, as defined in Section 3 of the Illinois
Affordable Housing Act, within the redevelopment
project area. If the low and very low-income units are
part of a residential redevelopment project that
includes units not affordable to low and very
low-income households, only the low and very
low-income units shall be eligible for benefits under
this subparagraph (F) of paragraph (11). The standards
for maintaining the occupancy by low-income households
and very low-income households, as defined in Section 3
of the Illinois Affordable Housing Act, of those units
constructed with eligible costs made available under
the provisions of this subparagraph (F) of paragraph
(11) shall be established by guidelines adopted by the
municipality. The responsibility for annually
documenting the initial occupancy of the units by
low-income households and very low-income households,
as defined in Section 3 of the Illinois Affordable
Housing Act, shall be that of the then current owner of
the property. For ownership units, the guidelines will
provide, at a minimum, for a reasonable recapture of

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funds, or other appropriate methods designed to
preserve the original affordability of the ownership
units. For rental units, the guidelines will provide,
at a minimum, for the affordability of rent to low and
very low-income households. As units become available,
they shall be rented to income-eligible tenants. The
municipality may modify these guidelines from time to
time; the guidelines, however, shall be in effect for
as long as tax increment revenue is being used to pay
for costs associated with the units or for the
retirement of bonds issued to finance the units or for
the life of the redevelopment project area, whichever
is later;
(11.5) If the redevelopment project area is located
within a municipality with a population of more than
100,000, the cost of day care services for children of
employees from low-income families working for businesses
located within the redevelopment project area and all or a
portion of the cost of operation of day care centers
established by redevelopment project area businesses to
serve employees from low-income families working in
businesses located in the redevelopment project area. For
the purposes of this paragraph, "low-income families"
means families whose annual income does not exceed 80% of
the municipal, county, or regional median income, adjusted
for family size, as the annual income and municipal,

HB1589 - 52 - LRB101 06664 AWJ 51691 b
county, or regional median income are determined from time
to time by the United States Department of Housing and
Urban Development; .
(12) Costs relating to the development of urban
agricultural areas under Division 15.2 of the Illinois
Municipal Code; .
(13) For any school district in a municipality with a
population in excess of 1,000,000, the costs associated
with employing qualified workers, as defined in Section
14-1.10 of the School Code, the costs of providing special
educational facilities and services, as defined in Section
14-1.08 of the School Code, school psychological services,
as defined in Section 14-1.09.1 of the School Code, or
school social work services, as defined in Section
14-1.09.2 of the School Code.
Unless explicitly stated herein the cost of construction of
new privately-owned buildings shall not be an eligible
redevelopment project cost.
After November 1, 1999 (the effective date of Public Act
91-478), none of the redevelopment project costs enumerated in
this subsection shall be eligible redevelopment project costs
if those costs would provide direct financial support to a
retail entity initiating operations in the redevelopment
project area while terminating operations at another Illinois
location within 10 miles of the redevelopment project area but
outside the boundaries of the redevelopment project area

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municipality. For purposes of this paragraph, termination
means a closing of a retail operation that is directly related
to the opening of the same operation or like retail entity
owned or operated by more than 50% of the original ownership in
a redevelopment project area, but it does not mean closing an
operation for reasons beyond the control of the retail entity,
as documented by the retail entity, subject to a reasonable
finding by the municipality that the current location contained
inadequate space, had become economically obsolete, or was no
longer a viable location for the retailer or serviceman.
No cost shall be a redevelopment project cost in a
redevelopment project area if used to demolish, remove, or
substantially modify a historic resource, after August 26, 2008
(the effective date of Public Act 95-934), unless no prudent
and feasible alternative exists. "Historic resource" for the
purpose of this paragraph means (i) a place or structure that
is included or eligible for inclusion on the National Register
of Historic Places or (ii) a contributing structure in a
district on the National Register of Historic Places. This
paragraph does not apply to a place or structure for which
demolition, removal, or modification is subject to review by
the preservation agency of a Certified Local Government
designated as such by the National Park Service of the United
States Department of the Interior.
If a special service area has been established pursuant to
the Special Service Area Tax Act or Special Service Area Tax

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Law, then any tax increment revenues derived from the tax
imposed pursuant to the Special Service Area Tax Act or Special
Service Area Tax Law may be used within the redevelopment
project area for the purposes permitted by that Act or Law as
well as the purposes permitted by this Act.
(q-1) For redevelopment project areas created pursuant to
subsection (p-1), redevelopment project costs are limited to
those costs in paragraph (q) that are related to the existing
or proposed Regional Transportation Authority Suburban Transit
Access Route (STAR Line) station.
(q-2) For a redevelopment project area located within a
transit facility improvement area established pursuant to
Section 11-74.4-3.3, redevelopment project costs means those
costs described in subsection (q) that are related to the
construction, reconstruction, rehabilitation, remodeling, or
repair of any existing or proposed transit facility.
(r) "State Sales Tax Boundary" means the redevelopment
project area or the amended redevelopment project area
boundaries which are determined pursuant to subsection (9) of
Section 11-74.4-8a of this Act. The Department of Revenue shall
certify pursuant to subsection (9) of Section 11-74.4-8a the
appropriate boundaries eligible for the determination of State
Sales Tax Increment.
(s) "State Sales Tax Increment" means an amount equal to
the increase in the aggregate amount of taxes paid by retailers
and servicemen, other than retailers and servicemen subject to

HB1589 - 55 - LRB101 06664 AWJ 51691 b
the Public Utilities Act, on transactions at places of business
located within a State Sales Tax Boundary pursuant to the
Retailers' Occupation Tax Act, the Use Tax Act, the Service Use
Tax Act, and the Service Occupation Tax Act, except such
portion of such increase that is paid into the State and Local
Sales Tax Reform Fund, the Local Government Distributive Fund,
the Local Government Tax Fund and the County and Mass Transit
District Fund, for as long as State participation exists, over
and above the Initial Sales Tax Amounts, Adjusted Initial Sales
Tax Amounts or the Revised Initial Sales Tax Amounts for such
taxes as certified by the Department of Revenue and paid under
those Acts by retailers and servicemen on transactions at
places of business located within the State Sales Tax Boundary
during the base year which shall be the calendar year
immediately prior to the year in which the municipality adopted
tax increment allocation financing, less 3.0% of such amounts
generated under the Retailers' Occupation Tax Act, Use Tax Act
and Service Use Tax Act and the Service Occupation Tax Act,
which sum shall be appropriated to the Department of Revenue to
cover its costs of administering and enforcing this Section.
For purposes of computing the aggregate amount of such taxes
for base years occurring prior to 1985, the Department of
Revenue shall compute the Initial Sales Tax Amount for such
taxes and deduct therefrom an amount equal to 4% of the
aggregate amount of taxes per year for each year the base year
is prior to 1985, but not to exceed a total deduction of 12%.

HB1589 - 56 - LRB101 06664 AWJ 51691 b
The amount so determined shall be known as the "Adjusted
Initial Sales Tax Amount". For purposes of determining the
State Sales Tax Increment the Department of Revenue shall for
each period subtract from the tax amounts received from
retailers and servicemen on transactions located in the State
Sales Tax Boundary, the certified Initial Sales Tax Amounts,
Adjusted Initial Sales Tax Amounts or Revised Initial Sales Tax
Amounts for the Retailers' Occupation Tax Act, the Use Tax Act,
the Service Use Tax Act and the Service Occupation Tax Act. For
the State Fiscal Year 1989 this calculation shall be made by
utilizing the calendar year 1987 to determine the tax amounts
received. For the State Fiscal Year 1990, this calculation
shall be made by utilizing the period from January 1, 1988,
until September 30, 1988, to determine the tax amounts received
from retailers and servicemen, which shall have deducted
therefrom nine-twelfths of the certified Initial Sales Tax
Amounts, Adjusted Initial Sales Tax Amounts or the Revised
Initial Sales Tax Amounts as appropriate. For the State Fiscal
Year 1991, this calculation shall be made by utilizing the
period from October 1, 1988, until June 30, 1989, to determine
the tax amounts received from retailers and servicemen, which
shall have deducted therefrom nine-twelfths of the certified
Initial State Sales Tax Amounts, Adjusted Initial Sales Tax
Amounts or the Revised Initial Sales Tax Amounts as
appropriate. For every State Fiscal Year thereafter, the
applicable period shall be the 12 months beginning July 1 and

HB1589 - 57 - LRB101 06664 AWJ 51691 b
ending on June 30, to determine the tax amounts received which
shall have deducted therefrom the certified Initial Sales Tax
Amounts, Adjusted Initial Sales Tax Amounts or the Revised
Initial Sales Tax Amounts. Municipalities intending to receive
a distribution of State Sales Tax Increment must report a list
of retailers to the Department of Revenue by October 31, 1988
and by July 31, of each year thereafter.
(t) "Taxing districts" means counties, townships, cities
and incorporated towns and villages, school, road, park,
sanitary, mosquito abatement, forest preserve, public health,
fire protection, river conservancy, tuberculosis sanitarium
and any other municipal corporations or districts with the
power to levy taxes.
(u) "Taxing districts' capital costs" means those costs of
taxing districts for capital improvements that are found by the
municipal corporate authorities to be necessary and directly
result from the redevelopment project.
(v) As used in subsection (a) of Section 11-74.4-3 of this
Act, "vacant land" means any parcel or combination of parcels
of real property without industrial, commercial, and
residential buildings which has not been used for commercial
agricultural purposes within 5 years prior to the designation
of the redevelopment project area, unless the parcel is
included in an industrial park conservation area or the parcel
has been subdivided; provided that if the parcel was part of a
larger tract that has been divided into 3 or more smaller

HB1589 - 58 - LRB101 06664 AWJ 51691 b
tracts that were accepted for recording during the period from
1950 to 1990, then the parcel shall be deemed to have been
subdivided, and all proceedings and actions of the municipality
taken in that connection with respect to any previously
approved or designated redevelopment project area or amended
redevelopment project area are hereby validated and hereby
declared to be legally sufficient for all purposes of this Act.
For purposes of this Section and only for land subject to the
subdivision requirements of the Plat Act, land is subdivided
when the original plat of the proposed Redevelopment Project
Area or relevant portion thereof has been properly certified,
acknowledged, approved, and recorded or filed in accordance
with the Plat Act and a preliminary plat, if any, for any
subsequent phases of the proposed Redevelopment Project Area or
relevant portion thereof has been properly approved and filed
in accordance with the applicable ordinance of the
municipality.
(w) "Annual Total Increment" means the sum of each
municipality's annual Net Sales Tax Increment and each
municipality's annual Net Utility Tax Increment. The ratio of
the Annual Total Increment of each municipality to the Annual
Total Increment for all municipalities, as most recently
calculated by the Department, shall determine the proportional
shares of the Illinois Tax Increment Fund to be distributed to
each municipality.
(x) "LEED certified" means any certification level of

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construction elements by a qualified Leadership in Energy and
Environmental Design Accredited Professional as determined by
the U.S. Green Building Council.
(y) "Green Globes certified" means any certification level
of construction elements by a qualified Green Globes
Professional as determined by the Green Building Initiative.
(Source: P.A. 99-792, eff. 8-12-16; 100-201, eff. 8-18-17;
100-465, eff. 8-31-17; 100-1133, eff. 1-1-19.)
(65 ILCS 5/11-74.4-5) (from Ch. 24, par. 11-74.4-5)
Sec. 11-74.4-5. Public hearing; joint review board.
(a) The changes made by this amendatory Act of the 91st
General Assembly do not apply to a municipality that, (i)
before the effective date of this amendatory Act of the 91st
General Assembly, has adopted an ordinance or resolution fixing
a time and place for a public hearing under this Section or
(ii) before July 1, 1999, has adopted an ordinance or
resolution providing for a feasibility study under Section
11-74.4-4.1, but has not yet adopted an ordinance approving
redevelopment plans and redevelopment projects or designating
redevelopment project areas under Section 11-74.4-4, until
after that municipality adopts an ordinance approving
redevelopment plans and redevelopment projects or designating
redevelopment project areas under Section 11-74.4-4;
thereafter the changes made by this amendatory Act of the 91st
General Assembly apply to the same extent that they apply to

HB1589 - 60 - LRB101 06664 AWJ 51691 b
redevelopment plans and redevelopment projects that were
approved and redevelopment projects that were designated
before the effective date of this amendatory Act of the 91st
General Assembly.
Prior to the adoption of an ordinance proposing the
designation of a redevelopment project area, or approving a
redevelopment plan or redevelopment project, the municipality
by its corporate authorities, or as it may determine by any
commission designated under subsection (k) of Section
11-74.4-4 shall adopt an ordinance or resolution fixing a time
and place for public hearing. At least 10 days prior to the
adoption of the ordinance or resolution establishing the time
and place for the public hearing, the municipality shall make
available for public inspection a redevelopment plan or a
separate report that provides in reasonable detail the basis
for the eligibility of the redevelopment project area. The
report along with the name of a person to contact for further
information shall be sent within a reasonable time after the
adoption of such ordinance or resolution to the affected taxing
districts by certified mail. On and after the effective date of
this amendatory Act of the 91st General Assembly, the
municipality shall print in a newspaper of general circulation
within the municipality a notice that interested persons may
register with the municipality in order to receive information
on the proposed designation of a redevelopment project area or
the approval of a redevelopment plan. The notice shall state

HB1589 - 61 - LRB101 06664 AWJ 51691 b
the place of registration and the operating hours of that
place. The municipality shall have adopted reasonable rules to
implement this registration process under Section 11-74.4-4.2.
The municipality shall provide notice of the availability of
the redevelopment plan and eligibility report, including how to
obtain this information, by mail within a reasonable time after
the adoption of the ordinance or resolution, to all residential
addresses that, after a good faith effort, the municipality
determines are located outside the proposed redevelopment
project area and within 750 feet of the boundaries of the
proposed redevelopment project area. This requirement is
subject to the limitation that in a municipality with a
population of over 100,000, if the total number of residential
addresses outside the proposed redevelopment project area and
within 750 feet of the boundaries of the proposed redevelopment
project area exceeds 750, the municipality shall be required to
provide the notice to only the 750 residential addresses that,
after a good faith effort, the municipality determines are
outside the proposed redevelopment project area and closest to
the boundaries of the proposed redevelopment project area.
Notwithstanding the foregoing, notice given after August 7,
2001 (the effective date of Public Act 92-263) and before the
effective date of this amendatory Act of the 92nd General
Assembly to residential addresses within 750 feet of the
boundaries of a proposed redevelopment project area shall be
deemed to have been sufficiently given in compliance with this

HB1589 - 62 - LRB101 06664 AWJ 51691 b
Act if given only to residents outside the boundaries of the
proposed redevelopment project area. The notice shall also be
provided by the municipality, regardless of its population, to
those organizations and residents that have registered with the
municipality for that information in accordance with the
registration guidelines established by the municipality under
Section 11-74.4-4.2.
At the public hearing any interested person or affected
taxing district may file with the municipal clerk written
objections to and may be heard orally in respect to any issues
embodied in the notice. The municipality shall hear all
protests and objections at the hearing and the hearing may be
adjourned to another date without further notice other than a
motion to be entered upon the minutes fixing the time and place
of the subsequent hearing. At the public hearing or at any time
prior to the adoption by the municipality of an ordinance
approving a redevelopment plan, the municipality may make
changes in the redevelopment plan. Changes which (1) add
additional parcels of property to the proposed redevelopment
project area, (2) substantially affect the general land uses
proposed in the redevelopment plan, (3) substantially change
the nature of or extend the life of the redevelopment project,
or (4) increase the number of inhabited residential units to be
displaced from the redevelopment project area, as measured from
the time of creation of the redevelopment project area, to a
total of more than 10, shall be made only after the

HB1589 - 63 - LRB101 06664 AWJ 51691 b
municipality gives notice, convenes a joint review board, and
conducts a public hearing pursuant to the procedures set forth
in this Section and in Section 11-74.4-6 of this Act. Changes
which do not (1) add additional parcels of property to the
proposed redevelopment project area, (2) substantially affect
the general land uses proposed in the redevelopment plan, (3)
substantially change the nature of or extend the life of the
redevelopment project, or (4) increase the number of inhabited
residential units to be displaced from the redevelopment
project area, as measured from the time of creation of the
redevelopment project area, to a total of more than 10, may be
made without further hearing, provided that the municipality
shall give notice of any such changes by mail to each affected
taxing district and registrant on the interested parties
registry, provided for under Section 11-74.4-4.2, and by
publication in a newspaper of general circulation within the
affected taxing district. Such notice by mail and by
publication shall each occur not later than 10 days following
the adoption by ordinance of such changes. Hearings with regard
to a redevelopment project area, project or plan may be held
simultaneously.
(b) Prior to holding a public hearing to approve or amend a
redevelopment plan or to designate or add additional parcels of
property to a redevelopment project area, the municipality
shall convene a joint review board. The board shall consist of
a representative selected by each community college district,

HB1589 - 64 - LRB101 06664 AWJ 51691 b
local elementary school district and high school district or
each local community unit school district, park district,
library district, township, fire protection district, and
county that will have the authority to directly levy taxes on
the property within the proposed redevelopment project area at
the time that the proposed redevelopment project area is
approved, a representative selected by the municipality and a
public member. The public member shall first be selected and
then the board's chairperson shall be selected by a majority of
the board members present and voting.
For redevelopment project areas with redevelopment plans
or proposed redevelopment plans that would result in the
displacement of residents from 10 or more inhabited residential
units or that include 75 or more inhabited residential units,
the public member shall be a person who resides in the
redevelopment project area. If, as determined by the housing
impact study provided for in paragraph (5) of subsection (n) of
Section 11-74.4-3, or if no housing impact study is required
then based on other reasonable data, the majority of
residential units are occupied by very low, low, or moderate
income households, as defined in Section 3 of the Illinois
Affordable Housing Act, the public member shall be a person who
resides in very low, low, or moderate income housing within the
redevelopment project area. Municipalities with fewer than
15,000 residents shall not be required to select a person who
lives in very low, low, or moderate income housing within the

HB1589 - 65 - LRB101 06664 AWJ 51691 b
redevelopment project area, provided that the redevelopment
plan or project will not result in displacement of residents
from 10 or more inhabited units, and the municipality so
certifies in the plan. If no person satisfying these
requirements is available or if no qualified person will serve
as the public member, then the joint review board is relieved
of this paragraph's selection requirements for the public
member.
Within 90 days of the effective date of this amendatory Act
of the 91st General Assembly, each municipality that designated
a redevelopment project area for which it was not required to
convene a joint review board under this Section shall convene a
joint review board to perform the duties specified under
paragraph (e) of this Section.
All board members shall be appointed and the first board
meeting shall be held at least 14 days but not more than 28
days after the mailing of notice by the municipality to the
taxing districts as required by Section 11-74.4-6(c).
Notwithstanding the preceding sentence, a municipality that
adopted either a public hearing resolution or a feasibility
resolution between July 1, 1999 and July 1, 2000 that called
for the meeting of the joint review board within 14 days of
notice of public hearing to affected taxing districts is deemed
to be in compliance with the notice, meeting, and public
hearing provisions of the Act. Such notice shall also advise
the taxing bodies represented on the joint review board of the

HB1589 - 66 - LRB101 06664 AWJ 51691 b
time and place of the first meeting of the board. Additional
meetings of the board shall be held upon the call of any
member. The municipality seeking designation of the
redevelopment project area shall provide administrative
support to the board.
The board shall review (i) the public record, planning
documents and proposed ordinances approving the redevelopment
plan and project and (ii) proposed amendments to the
redevelopment plan or additions of parcels of property to the
redevelopment project area to be adopted by the municipality.
As part of its deliberations, the board may hold additional
hearings on the proposal. A board's recommendation shall be an
advisory, non-binding recommendation. The recommendation shall
be adopted by a majority of those members present and voting.
The recommendations shall be submitted to the municipality
within 30 days after convening of the board. Failure of the
board to submit its report on a timely basis shall not be cause
to delay the public hearing or any other step in the process of
designating or amending the redevelopment project area but
shall be deemed to constitute approval by the joint review
board of the matters before it.
The board shall base its recommendation to approve or
disapprove the redevelopment plan and the designation of the
redevelopment project area or the amendment of the
redevelopment plan or addition of parcels of property to the
redevelopment project area on the basis of the redevelopment

HB1589 - 67 - LRB101 06664 AWJ 51691 b
project area and redevelopment plan satisfying the plan
requirements, the eligibility criteria defined in Section
11-74.4-3, and the objectives of this Act.
The board shall issue a written report describing why the
redevelopment plan and project area or the amendment thereof
meets or fails to meet one or more of the objectives of this
Act and both the plan requirements and the eligibility criteria
defined in Section 11-74.4-3. In the event the Board does not
file a report it shall be presumed that these taxing bodies
find the redevelopment project area and redevelopment plan
satisfy the objectives of this Act and the plan requirements
and eligibility criteria.
If the board recommends rejection of the matters before it,
the municipality will have 30 days within which to resubmit the
plan or amendment. During this period, the municipality will
meet and confer with the board and attempt to resolve those
issues set forth in the board's written report that led to the
rejection of the plan or amendment.
Notwithstanding the resubmission set forth above, the
municipality may commence the scheduled public hearing and
either adjourn the public hearing or continue the public
hearing until a date certain. Prior to continuing any public
hearing to a date certain, the municipality shall announce
during the public hearing the time, date, and location for the
reconvening of the public hearing. Any changes to the
redevelopment plan necessary to satisfy the issues set forth in

HB1589 - 68 - LRB101 06664 AWJ 51691 b
the joint review board report shall be the subject of a public
hearing before the hearing is adjourned if the changes would
(1) substantially affect the general land uses proposed in the
redevelopment plan, (2) substantially change the nature of or
extend the life of the redevelopment project, or (3) increase
the number of inhabited residential units to be displaced from
the redevelopment project area, as measured from the time of
creation of the redevelopment project area, to a total of more
than 10. Changes to the redevelopment plan necessary to satisfy
the issues set forth in the joint review board report shall not
require any further notice or convening of a joint review board
meeting, except that any changes to the redevelopment plan that
would add additional parcels of property to the proposed
redevelopment project area shall be subject to the notice,
public hearing, and joint review board meeting requirements
established for such changes by subsection (a) of Section
11-74.4-5.
In the event that the municipality and the board are unable
to resolve these differences, or in the event that the
resubmitted plan or amendment is rejected by the board, the
municipality may proceed with the plan or amendment, but only
upon a three-fifths vote of the corporate authority responsible
for approval of the plan or amendment, excluding positions of
members that are vacant and those members that are ineligible
to vote because of conflicts of interest.
(c) After a municipality has by ordinance approved a

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redevelopment plan and designated a redevelopment project
area, the plan may be amended and additional properties may be
added to the redevelopment project area only as herein
provided. Amendments which (1) add additional parcels of
property to the proposed redevelopment project area, (2)
substantially affect the general land uses proposed in the
redevelopment plan, (3) substantially change the nature of the
redevelopment project, (4) increase the total estimated
redevelopment project costs set out in the redevelopment plan
by more than 5% after adjustment for inflation from the date
the plan was adopted, (5) add additional redevelopment project
costs to the itemized list of redevelopment project costs set
out in the redevelopment plan, or (6) increase the number of
inhabited residential units to be displaced from the
redevelopment project area, as measured from the time of
creation of the redevelopment project area, to a total of more
than 10, shall be made only after the municipality gives
notice, convenes a joint review board, and conducts a public
hearing pursuant to the procedures set forth in this Section
and in Section 11-74.4-6 of this Act. Changes which do not (1)
add additional parcels of property to the proposed
redevelopment project area, (2) substantially affect the
general land uses proposed in the redevelopment plan, (3)
substantially change the nature of the redevelopment project,
(4) increase the total estimated redevelopment project cost set
out in the redevelopment plan by more than 5% after adjustment

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for inflation from the date the plan was adopted, (5) add
additional redevelopment project costs to the itemized list of
redevelopment project costs set out in the redevelopment plan,
or (6) increase the number of inhabited residential units to be
displaced from the redevelopment project area, as measured from
the time of creation of the redevelopment project area, to a
total of more than 10, may be made without further public
hearing and related notices and procedures including the
convening of a joint review board as set forth in Section
11-74.4-6 of this Act, provided that the municipality shall
give notice of any such changes by mail to each affected taxing
district and registrant on the interested parties registry,
provided for under Section 11-74.4-4.2, and by publication in a
newspaper of general circulation within the affected taxing
district. Such notice by mail and by publication shall each
occur not later than 10 days following the adoption by
ordinance of such changes.
(d) After the effective date of this amendatory Act of the
91st General Assembly, a municipality shall submit in an
electronic format the following information for each
redevelopment project area (i) to the State Comptroller under
Section 8-8-3.5 of the Illinois Municipal Code, subject to any
extensions or exemptions provided at the Comptroller's
discretion under that Section, and (ii) to all taxing districts
overlapping the redevelopment project area no later than 180
days after the close of each municipal fiscal year or as soon

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thereafter as the audited financial statements become
available and, in any case, shall be submitted before the
annual meeting of the Joint Review Board to each of the taxing
districts that overlap the redevelopment project area:
(1) Any amendments to the redevelopment plan, the
redevelopment project area, or the State Sales Tax
Boundary.
(1.5) A list of the redevelopment project areas
administered by the municipality and, if applicable, the
date each redevelopment project area was designated or
terminated by the municipality.
(2) Audited financial statements of the special tax
allocation fund once a cumulative total of $100,000 has
been deposited in the fund.
(3) Certification of the Chief Executive Officer of the
municipality that the municipality has complied with all of
the requirements of this Act during the preceding fiscal
year.
(4) An opinion of legal counsel that the municipality
is in compliance with this Act.
(5) An analysis of the special tax allocation fund
which sets forth:
(A) the balance in the special tax allocation fund
at the beginning of the fiscal year;
(B) all amounts deposited in the special tax
allocation fund by source;

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(C) an itemized list of all expenditures from the
special tax allocation fund by category of permissible
redevelopment project cost; and
(D) for municipalities with a population less than
1,000,000, the balance in the special tax allocation
fund at the end of the fiscal year including a
breakdown of that balance by source and a breakdown of
that balance identifying any portion of the balance
that is required, pledged, earmarked, or otherwise
designated for payment of or securing of obligations
and anticipated redevelopment project costs. Any
portion of such ending balance that has not been
identified or is not identified as being required,
pledged, earmarked, or otherwise designated for
payment of or securing of obligations or anticipated
redevelopment projects costs shall be designated as
surplus as set forth in Section 11-74.4-7 hereof.
(E) For municipalities with a population greater
than 1,000,000, the balance in the special tax
allocation fund at the end of the fiscal year,
including a breakdown of that balance by source and a
breakdown of that balance identifying any portion of
the balance that is required, pledged, earmarked, or
otherwise designated for payment of or securing of
obligations. Any portion of such ending balance that
has not been identified or is not identified as being

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required, pledged, earmarked, or otherwise designated
for payment of or securing of obligations shall be
designated as surplus, and used, as set forth in
Section 11-74.4-7.
(6) A description of all property purchased by the
municipality within the redevelopment project area
including:
(A) Street address.
(B) Approximate size or description of property.
(C) Purchase price.
(D) Seller of property.
(7) A statement setting forth all activities
undertaken in furtherance of the objectives of the
redevelopment plan, including:
(A) Any project implemented in the preceding
fiscal year.
(B) A description of the redevelopment activities
undertaken.
(C) A description of any agreements entered into by
the municipality with regard to the disposition or
redevelopment of any property within the redevelopment
project area or the area within the State Sales Tax
Boundary.
(D) Additional information on the use of all funds
received under this Division and steps taken by the
municipality to achieve the objectives of the

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redevelopment plan.
(E) Information regarding contracts that the
municipality's tax increment advisors or consultants
have entered into with entities or persons that have
received, or are receiving, payments financed by tax
increment revenues produced by the same redevelopment
project area.
(F) Any reports submitted to the municipality by
the joint review board.
(G) A review of public and, to the extent possible,
private investment actually undertaken to date after
the effective date of this amendatory Act of the 91st
General Assembly and estimated to be undertaken during
the following year. This review shall, on a
project-by-project basis, set forth the estimated
amounts of public and private investment incurred
after the effective date of this amendatory Act of the
91st General Assembly and provide the ratio of private
investment to public investment to the date of the
report and as estimated to the completion of the
redevelopment project.
(8) With regard to any obligations issued by the
municipality:
(A) copies of any official statements; and
(B) an analysis prepared by financial advisor or
underwriter setting forth: (i) nature and term of

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obligation; and (ii) projected debt service including
required reserves and debt coverage.
(9) For special tax allocation funds that have
experienced cumulative deposits of incremental tax
revenues of $100,000 or more, a certified audit report
reviewing compliance with this Act performed by an
independent public accountant certified and licensed by
the authority of the State of Illinois. The financial
portion of the audit must be conducted in accordance with
Standards for Audits of Governmental Organizations,
Programs, Activities, and Functions adopted by the
Comptroller General of the United States (1981), as
amended, or the standards specified by Section 8-8-5 of the
Illinois Municipal Auditing Law of the Illinois Municipal
Code. The audit report shall contain a letter from the
independent certified public accountant indicating
compliance or noncompliance with the requirements of
subsection (q) of Section 11-74.4-3. For redevelopment
plans or projects that would result in the displacement of
residents from 10 or more inhabited residential units or
that contain 75 or more inhabited residential units, notice
of the availability of the information, including how to
obtain the report, required in this subsection shall also
be sent by mail to all residents or organizations that
operate in the municipality that register with the
municipality for that information according to

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registration procedures adopted under Section 11-74.4-4.2.
All municipalities are subject to this provision.
(10) A list of all intergovernmental agreements in
effect during the fiscal year to which the municipality is
a party and an accounting of any moneys transferred or
received by the municipality during that fiscal year
pursuant to those intergovernmental agreements.
(d-1) Prior to the effective date of this amendatory Act of
the 91st General Assembly, municipalities with populations of
over 1,000,000 shall, after adoption of a redevelopment plan or
project, make available upon request to any taxing district in
which the redevelopment project area is located the following
information:
(1) Any amendments to the redevelopment plan, the
redevelopment project area, or the State Sales Tax
Boundary; and
(2) In connection with any redevelopment project area
for which the municipality has outstanding obligations
issued to provide for redevelopment project costs pursuant
to Section 11-74.4-7, audited financial statements of the
special tax allocation fund.
(e) The joint review board shall meet annually 180 days
after the close of the municipal fiscal year or as soon as the
redevelopment project audit for that fiscal year becomes
available to review the effectiveness and status of the
redevelopment project area up to that date.

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(f) (Blank).
(g) In the event that a municipality has held a public
hearing under this Section prior to March 14, 1994 (the
effective date of Public Act 88-537), the requirements imposed
by Public Act 88-537 relating to the method of fixing the time
and place for public hearing, the materials and information
required to be made available for public inspection, and the
information required to be sent after adoption of an ordinance
or resolution fixing a time and place for public hearing shall
not be applicable.
(h) On and after the effective date of this amendatory Act
of the 96th General Assembly, the State Comptroller must post
on the State Comptroller's official website the information
submitted by a municipality pursuant to subsection (d) of this
Section. The information must be posted no later than 45 days
after the State Comptroller receives the information from the
municipality. The State Comptroller must also post a list of
the municipalities not in compliance with the reporting
requirements set forth in subsection (d) of this Section.
(i) No later than 10 years after the corporate authorities
of a municipality adopt an ordinance to establish a
redevelopment project area, the municipality must compile a
status report concerning the redevelopment project area. The
status report must detail without limitation the following: (i)
the amount of revenue generated within the redevelopment
project area, (ii) any expenditures made by the municipality

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for the redevelopment project area including without
limitation expenditures from the special tax allocation fund,
(iii) the status of planned activities, goals, and objectives
set forth in the redevelopment plan including details on new or
planned construction within the redevelopment project area,
(iv) the amount of private and public investment within the
redevelopment project area, and (v) any other relevant
evaluation or performance data. Within 30 days after the
municipality compiles the status report, the municipality must
hold at least one public hearing concerning the report. The
municipality must provide 20 days' public notice of the
hearing.
(j) Beginning in fiscal year 2011 and in each fiscal year
thereafter, a municipality must detail in its annual budget (i)
the revenues generated from redevelopment project areas by
source and (ii) the expenditures made by the municipality for
redevelopment project areas.
(Source: P.A. 98-922, eff. 8-15-14.)
(65 ILCS 5/11-74.4-7) (from Ch. 24, par. 11-74.4-7)
Sec. 11-74.4-7. Obligations secured by the special tax
allocation fund set forth in Section 11-74.4-8 for the
redevelopment project area may be issued to provide for
redevelopment project costs. Such obligations, when so issued,
shall be retired in the manner provided in the ordinance
authorizing the issuance of such obligations by the receipts of

HB1589 - 79 - LRB101 06664 AWJ 51691 b
taxes levied as specified in Section 11-74.4-9 against the
taxable property included in the area, by revenues as specified
by Section 11-74.4-8a and other revenue designated by the
municipality. A municipality may in the ordinance pledge all or
any part of the funds in and to be deposited in the special tax
allocation fund created pursuant to Section 11-74.4-8 to the
payment of the redevelopment project costs and obligations. For
municipalities with a population less than 1,000,000, any Any
pledge of funds in the special tax allocation fund shall
provide for distribution to the taxing districts and to the
Illinois Department of Revenue of moneys not required, pledged,
earmarked, or otherwise designated for payment and securing of
the obligations and anticipated redevelopment project costs
and such excess funds shall be calculated annually and deemed
to be "surplus" funds. In the event a municipality, with a
population less than 1,000,000, only applies or pledges a
portion of the funds in the special tax allocation fund for the
payment or securing of anticipated redevelopment project costs
or of obligations, any such funds remaining in the special tax
allocation fund after complying with the requirements of the
application or pledge, shall also be calculated annually and
deemed "surplus" funds. All surplus funds in the special tax
allocation fund shall be distributed annually within 180 days
after the close of the municipality's fiscal year by being paid
by the municipal treasurer to the County Collector, to the
Department of Revenue and to the municipality in direct

HB1589 - 80 - LRB101 06664 AWJ 51691 b
proportion to the tax incremental revenue received as a result
of an increase in the equalized assessed value of property in
the redevelopment project area, tax incremental revenue
received from the State and tax incremental revenue received
from the municipality, but not to exceed as to each such source
the total incremental revenue received from that source. The
County Collector shall thereafter make distribution to the
respective taxing districts in the same manner and proportion
as the most recent distribution by the county collector to the
affected districts of real property taxes from real property in
the redevelopment project area. For municipalities with a
population greater than 1,000,000, the balance in the special
tax allocation fund at the end of the fiscal year that is not
required, pledged, earmarked, or otherwise designated for
payment of or securing of obligations shall be entirely used to
pay costs of special education, social service, and other costs
of its public school district as described in paragraph (12) of
subsection (q) of Section 11-74.4-3.
Without limiting the foregoing in this Section, the
municipality may in addition to obligations secured by the
special tax allocation fund pledge for a period not greater
than the term of the obligations towards payment of such
obligations any part or any combination of the following: (a)
net revenues of all or part of any redevelopment project; (b)
taxes levied and collected on any or all property in the
municipality; (c) the full faith and credit of the

HB1589 - 81 - LRB101 06664 AWJ 51691 b
municipality; (d) a mortgage on part or all of the
redevelopment project; (d-5) repayment of bonds issued
pursuant to subsection (p-130) of Section 19-1 of the School
Code; or (e) any other taxes or anticipated receipts that the
municipality may lawfully pledge.
Such obligations may be issued in one or more series
bearing interest at such rate or rates as the corporate
authorities of the municipality shall determine by ordinance.
Such obligations shall bear such date or dates, mature at such
time or times not exceeding 20 years from their respective
dates, be in such denomination, carry such registration
privileges, be executed in such manner, be payable in such
medium of payment at such place or places, contain such
covenants, terms and conditions, and be subject to redemption
as such ordinance shall provide. Obligations issued pursuant to
this Act may be sold at public or private sale at such price as
shall be determined by the corporate authorities of the
municipalities. No referendum approval of the electors shall be
required as a condition to the issuance of obligations pursuant
to this Division except as provided in this Section.
In the event the municipality authorizes issuance of
obligations pursuant to the authority of this Division secured
by the full faith and credit of the municipality, which
obligations are other than obligations which may be issued
under home rule powers provided by Article VII, Section 6 of
the Illinois Constitution, or pledges taxes pursuant to (b) or

HB1589 - 82 - LRB101 06664 AWJ 51691 b
(c) of the second paragraph of this section, the ordinance
authorizing the issuance of such obligations or pledging such
taxes shall be published within 10 days after such ordinance
has been passed in one or more newspapers, with general
circulation within such municipality. The publication of the
ordinance shall be accompanied by a notice of (1) the specific
number of voters required to sign a petition requesting the
question of the issuance of such obligations or pledging taxes
to be submitted to the electors; (2) the time in which such
petition must be filed; and (3) the date of the prospective
referendum. The municipal clerk shall provide a petition form
to any individual requesting one.
If no petition is filed with the municipal clerk, as
hereinafter provided in this Section, within 30 days after the
publication of the ordinance, the ordinance shall be in effect.
But, if within that 30 day period a petition is filed with the
municipal clerk, signed by electors in the municipality
numbering 10% or more of the number of registered voters in the
municipality, asking that the question of issuing obligations
using full faith and credit of the municipality as security for
the cost of paying for redevelopment project costs, or of
pledging taxes for the payment of such obligations, or both, be
submitted to the electors of the municipality, the corporate
authorities of the municipality shall call a special election
in the manner provided by law to vote upon that question, or,
if a general, State or municipal election is to be held within

HB1589 - 83 - LRB101 06664 AWJ 51691 b
a period of not less than 30 or more than 90 days from the date
such petition is filed, shall submit the question at the next
general, State or municipal election. If it appears upon the
canvass of the election by the corporate authorities that a
majority of electors voting upon the question voted in favor
thereof, the ordinance shall be in effect, but if a majority of
the electors voting upon the question are not in favor thereof,
the ordinance shall not take effect.
The ordinance authorizing the obligations may provide that
the obligations shall contain a recital that they are issued
pursuant to this Division, which recital shall be conclusive
evidence of their validity and of the regularity of their
issuance.
In the event the municipality authorizes issuance of
obligations pursuant to this Section secured by the full faith
and credit of the municipality, the ordinance authorizing the
obligations may provide for the levy and collection of a direct
annual tax upon all taxable property within the municipality
sufficient to pay the principal thereof and interest thereon as
it matures, which levy may be in addition to and exclusive of
the maximum of all other taxes authorized to be levied by the
municipality, which levy, however, shall be abated to the
extent that monies from other sources are available for payment
of the obligations and the municipality certifies the amount of
said monies available to the county clerk.
A certified copy of such ordinance shall be filed with the

HB1589 - 84 - LRB101 06664 AWJ 51691 b
county clerk of each county in which any portion of the
municipality is situated, and shall constitute the authority
for the extension and collection of the taxes to be deposited
in the special tax allocation fund.
A municipality may also issue its obligations to refund in
whole or in part, obligations theretofore issued by such
municipality under the authority of this Act, whether at or
prior to maturity, provided however, that the last maturity of
the refunding obligations may not be later than the dates set
forth under Section 11-74.4-3.5.
In the event a municipality issues obligations under home
rule powers or other legislative authority the proceeds of
which are pledged to pay for redevelopment project costs, the
municipality may, if it has followed the procedures in
conformance with this division, retire said obligations from
funds in the special tax allocation fund in amounts and in such
manner as if such obligations had been issued pursuant to the
provisions of this division.
All obligations heretofore or hereafter issued pursuant to
this Act shall not be regarded as indebtedness of the
municipality issuing such obligations or any other taxing
district for the purpose of any limitation imposed by law.
(Source: P.A. 100-531, eff. 9-22-17.)
(65 ILCS 5/11-74.4-8) (from Ch. 24, par. 11-74.4-8)
Sec. 11-74.4-8. Tax increment allocation financing. A

HB1589 - 85 - LRB101 06664 AWJ 51691 b
municipality may not adopt tax increment financing in a
redevelopment project area after the effective date of this
amendatory Act of 1997 that will encompass an area that is
currently included in an enterprise zone created under the
Illinois Enterprise Zone Act unless that municipality,
pursuant to Section 5.4 of the Illinois Enterprise Zone Act,
amends the enterprise zone designating ordinance to limit the
eligibility for tax abatements as provided in Section 5.4.1 of
the Illinois Enterprise Zone Act. A municipality, at the time a
redevelopment project area is designated, may adopt tax
increment allocation financing by passing an ordinance
providing that the ad valorem taxes, if any, arising from the
levies upon taxable real property in such redevelopment project
area by taxing districts and tax rates determined in the manner
provided in paragraph (c) of Section 11-74.4-9 each year after
the effective date of the ordinance until redevelopment project
costs and all municipal obligations financing redevelopment
project costs incurred under this Division have been paid shall
be divided as follows, provided, however, that with respect to
any redevelopment project area located within a transit
facility improvement area established pursuant to Section
11-74.4-3.3 in a municipality with a population of 1,000,000 or
more, ad valorem taxes, if any, arising from the levies upon
taxable real property in such redevelopment project area shall
be allocated as specifically provided in this Section:
(a) That portion of taxes levied upon each taxable lot,

HB1589 - 86 - LRB101 06664 AWJ 51691 b
block, tract or parcel of real property which is
attributable to the lower of the current equalized assessed
value or the initial equalized assessed value of each such
taxable lot, block, tract or parcel of real property in the
redevelopment project area shall be allocated to and when
collected shall be paid by the county collector to the
respective affected taxing districts in the manner
required by law in the absence of the adoption of tax
increment allocation financing.
(b) Except from a tax levied by a township to retire
bonds issued to satisfy court-ordered damages, that
portion, if any, of such taxes which is attributable to the
increase in the current equalized assessed valuation of
each taxable lot, block, tract or parcel of real property
in the redevelopment project area over and above the
initial equalized assessed value of each property in the
project area shall be allocated to and when collected shall
be paid to the municipal treasurer who shall deposit said
taxes into a special fund called the special tax allocation
fund of the municipality for the purpose of paying
redevelopment project costs and obligations incurred in
the payment thereof. In any county with a population of
3,000,000 or more that has adopted a procedure for
collecting taxes that provides for one or more of the
installments of the taxes to be billed and collected on an
estimated basis, the municipal treasurer shall be paid for

HB1589 - 87 - LRB101 06664 AWJ 51691 b
deposit in the special tax allocation fund of the
municipality, from the taxes collected from estimated
bills issued for property in the redevelopment project
area, the difference between the amount actually collected
from each taxable lot, block, tract, or parcel of real
property within the redevelopment project area and an
amount determined by multiplying the rate at which taxes
were last extended against the taxable lot, block, track,
or parcel of real property in the manner provided in
subsection (c) of Section 11-74.4-9 by the initial
equalized assessed value of the property divided by the
number of installments in which real estate taxes are
billed and collected within the county; provided that the
payments on or before December 31, 1999 to a municipal
treasurer shall be made only if each of the following
conditions are met:
(1) The total equalized assessed value of the
redevelopment project area as last determined was not
less than 175% of the total initial equalized assessed
value.
(2) Not more than 50% of the total equalized
assessed value of the redevelopment project area as
last determined is attributable to a piece of property
assigned a single real estate index number.
(3) The municipal clerk has certified to the county
clerk that the municipality has issued its obligations

HB1589 - 88 - LRB101 06664 AWJ 51691 b
to which there has been pledged the incremental
property taxes of the redevelopment project area or
taxes levied and collected on any or all property in
the municipality or the full faith and credit of the
municipality to pay or secure payment for all or a
portion of the redevelopment project costs. The
certification shall be filed annually no later than
September 1 for the estimated taxes to be distributed
in the following year; however, for the year 1992 the
certification shall be made at any time on or before
March 31, 1992.
(4) The municipality has not requested that the
total initial equalized assessed value of real
property be adjusted as provided in subsection (b) of
Section 11-74.4-9.
The conditions of paragraphs (1) through (4) do not
apply after December 31, 1999 to payments to a municipal
treasurer made by a county with 3,000,000 or more
inhabitants that has adopted an estimated billing
procedure for collecting taxes. If a county that has
adopted the estimated billing procedure makes an erroneous
overpayment of tax revenue to the municipal treasurer, then
the county may seek a refund of that overpayment. The
county shall send the municipal treasurer a notice of
liability for the overpayment on or before the mailing date
of the next real estate tax bill within the county. The

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refund shall be limited to the amount of the overpayment.
It is the intent of this Division that after the
effective date of this amendatory Act of 1988 a
municipality's own ad valorem tax arising from levies on
taxable real property be included in the determination of
incremental revenue in the manner provided in paragraph (c)
of Section 11-74.4-9. If the municipality does not extend
such a tax, it shall annually deposit in the municipality's
Special Tax Increment Fund an amount equal to 10% of the
total contributions to the fund from all other taxing
districts in that year. The annual 10% deposit required by
this paragraph shall be limited to the actual amount of
municipally produced incremental tax revenues available to
the municipality from taxpayers located in the
redevelopment project area in that year if: (a) the plan
for the area restricts the use of the property primarily to
industrial purposes, (b) the municipality establishing the
redevelopment project area is a home-rule community with a
1990 population of between 25,000 and 50,000, (c) the
municipality is wholly located within a county with a 1990
population of over 750,000 and (d) the redevelopment
project area was established by the municipality prior to
June 1, 1990. This payment shall be in lieu of a
contribution of ad valorem taxes on real property. If no
such payment is made, any redevelopment project area of the
municipality shall be dissolved.

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If a municipality has adopted tax increment allocation
financing by ordinance and the County Clerk thereafter
certifies the "total initial equalized assessed value as
adjusted" of the taxable real property within such
redevelopment project area in the manner provided in
paragraph (b) of Section 11-74.4-9, each year after the
date of the certification of the total initial equalized
assessed value as adjusted until redevelopment project
costs and all municipal obligations financing
redevelopment project costs have been paid the ad valorem
taxes, if any, arising from the levies upon the taxable
real property in such redevelopment project area by taxing
districts and tax rates determined in the manner provided
in paragraph (c) of Section 11-74.4-9 shall be divided as
follows, provided, however, that with respect to any
redevelopment project area located within a transit
facility improvement area established pursuant to Section
11-74.4-3.3 in a municipality with a population of
1,000,000 or more, ad valorem taxes, if any, arising from
the levies upon the taxable real property in such
redevelopment project area shall be allocated as
specifically provided in this Section:
(1) That portion of the taxes levied upon each
taxable lot, block, tract or parcel of real property
which is attributable to the lower of the current
equalized assessed value or "current equalized

HB1589 - 91 - LRB101 06664 AWJ 51691 b
assessed value as adjusted" or the initial equalized
assessed value of each such taxable lot, block, tract,
or parcel of real property existing at the time tax
increment financing was adopted, minus the total
current homestead exemptions under Article 15 of the
Property Tax Code in the redevelopment project area
shall be allocated to and when collected shall be paid
by the county collector to the respective affected
taxing districts in the manner required by law in the
absence of the adoption of tax increment allocation
financing.
(2) That portion, if any, of such taxes which is
attributable to the increase in the current equalized
assessed valuation of each taxable lot, block, tract,
or parcel of real property in the redevelopment project
area, over and above the initial equalized assessed
value of each property existing at the time tax
increment financing was adopted, minus the total
current homestead exemptions pertaining to each piece
of property provided by Article 15 of the Property Tax
Code in the redevelopment project area, shall be
allocated to and when collected shall be paid to the
municipal Treasurer, who shall deposit said taxes into
a special fund called the special tax allocation fund
of the municipality for the purpose of paying
redevelopment project costs and obligations incurred

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in the payment thereof.
The municipality may pledge in the ordinance the funds
in and to be deposited in the special tax allocation fund
for the payment of such costs and obligations. No part of
the current equalized assessed valuation of each property
in the redevelopment project area attributable to any
increase above the total initial equalized assessed value,
or the total initial equalized assessed value as adjusted,
of such properties shall be used in calculating the general
State aid formula, provided for in Section 18-8 of the
School Code, or the evidence-based funding formula,
provided for in Section 18-8.15 of the School Code, until
such time as all redevelopment project costs have been paid
as provided for in this Section.
Whenever a municipality issues bonds for the purpose of
financing redevelopment project costs, such municipality
may provide by ordinance for the appointment of a trustee,
which may be any trust company within the State, and for
the establishment of such funds or accounts to be
maintained by such trustee as the municipality shall deem
necessary to provide for the security and payment of the
bonds. If such municipality provides for the appointment of
a trustee, such trustee shall be considered the assignee of
any payments assigned by the municipality pursuant to such
ordinance and this Section. Any amounts paid to such
trustee as assignee shall be deposited in the funds or

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accounts established pursuant to such trust agreement, and
shall be held by such trustee in trust for the benefit of
the holders of the bonds, and such holders shall have a
lien on and a security interest in such funds or accounts
so long as the bonds remain outstanding and unpaid. Upon
retirement of the bonds, the trustee shall pay over any
excess amounts held to the municipality for deposit in the
special tax allocation fund.
For municipalities with a population less than
1,000,000, when When such redevelopment projects costs,
including without limitation all municipal obligations
financing redevelopment project costs incurred under this
Division, have been paid, all surplus funds then remaining
in the special tax allocation fund shall be distributed by
being paid by the municipal treasurer to the Department of
Revenue, the municipality and the county collector; first
to the Department of Revenue and the municipality in direct
proportion to the tax incremental revenue received from the
State and the municipality, but not to exceed the total
incremental revenue received from the State or the
municipality less any annual surplus distribution of
incremental revenue previously made; with any remaining
funds to be paid to the County Collector who shall
immediately thereafter pay said funds to the taxing
districts in the redevelopment project area in the same
manner and proportion as the most recent distribution by

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the county collector to the affected districts of real
property taxes from real property in the redevelopment
project area. For municipalities with a population greater
than 1,000,000, the balance in the special tax allocation
fund at the end of the fiscal year that is not required,
pledged, earmarked, or otherwise designated for payment of
or securing of obligations shall be entirely used to pay
costs of special education, social service, and other costs
of its public school district as described in paragraph
(12) of subsection (q) of Section 11-74.4-3.
Upon the payment of all redevelopment project costs,
the retirement of obligations, the distribution of any
excess monies pursuant to this Section, and final closing
of the books and records of the redevelopment project area,
the municipality shall adopt an ordinance dissolving the
special tax allocation fund for the redevelopment project
area and terminating the designation of the redevelopment
project area as a redevelopment project area. Title to real
or personal property and public improvements acquired by or
for the municipality as a result of the redevelopment
project and plan shall vest in the municipality when
acquired and shall continue to be held by the municipality
after the redevelopment project area has been terminated.
Municipalities shall notify affected taxing districts
prior to November 1 if the redevelopment project area is to
be terminated by December 31 of that same year. If a

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municipality extends estimated dates of completion of a
redevelopment project and retirement of obligations to
finance a redevelopment project, as allowed by this
amendatory Act of 1993, that extension shall not extend the
property tax increment allocation financing authorized by
this Section. Thereafter the rates of the taxing districts
shall be extended and taxes levied, collected and
distributed in the manner applicable in the absence of the
adoption of tax increment allocation financing.
If a municipality with a population of 1,000,000 or
more has adopted by ordinance tax increment allocation
financing for a redevelopment project area located in a
transit facility improvement area established pursuant to
Section 11-74.4-3.3, for each year after the effective date
of the ordinance until redevelopment project costs and all
municipal obligations financing redevelopment project
costs have been paid, the ad valorem taxes, if any, arising
from the levies upon the taxable real property in that
redevelopment project area by taxing districts and tax
rates determined in the manner provided in paragraph (c) of
Section 11-74.4-9 shall be divided as follows:
(1) That portion of the taxes levied upon each
taxable lot, block, tract or parcel of real property
which is attributable to the lower of (i) the current
equalized assessed value or "current equalized
assessed value as adjusted" or (ii) the initial

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equalized assessed value of each such taxable lot,
block, tract, or parcel of real property existing at
the time tax increment financing was adopted, minus the
total current homestead exemptions under Article 15 of
the Property Tax Code in the redevelopment project area
shall be allocated to and when collected shall be paid
by the county collector to the respective affected
taxing districts in the manner required by law in the
absence of the adoption of tax increment allocation
financing.
(2) That portion, if any, of such taxes which is
attributable to the increase in the current equalized
assessed valuation of each taxable lot, block, tract,
or parcel of real property in the redevelopment project
area, over and above the initial equalized assessed
value of each property existing at the time tax
increment financing was adopted, minus the total
current homestead exemptions pertaining to each piece
of property provided by Article 15 of the Property Tax
Code in the redevelopment project area, shall be
allocated to and when collected shall be paid by the
county collector as follows:
(A) First, that portion which would be payable
to a school district whose boundaries are
coterminous with such municipality in the absence
of the adoption of tax increment allocation

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financing, shall be paid to such school district in
the manner required by law in the absence of the
adoption of tax increment allocation financing;
then
(B) 80% of the remaining portion shall be paid
to the municipal Treasurer, who shall deposit said
taxes into a special fund called the special tax
allocation fund of the municipality for the
purpose of paying redevelopment project costs and
obligations incurred in the payment thereof; and
then
(C) 20% of the remaining portion shall be paid
to the respective affected taxing districts, other
than the school district described in clause (a)
above, in the manner required by law in the absence
of the adoption of tax increment allocation
financing.
Nothing in this Section shall be construed as relieving
property in such redevelopment project areas from being
assessed as provided in the Property Tax Code or as relieving
owners of such property from paying a uniform rate of taxes, as
required by Section 4 of Article IX of the Illinois
Constitution.
(Source: P.A. 99-792, eff. 8-12-16; 100-465, eff. 8-31-17.)
(65 ILCS 5/11-74.4-8a) (from Ch. 24, par. 11-74.4-8a)

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Sec. 11-74.4-8a. (1) Until June 1, 1988, a municipality
which has adopted tax increment allocation financing prior to
January 1, 1987, may by ordinance (1) authorize the Department
of Revenue, subject to appropriation, to annually certify and
cause to be paid from the Illinois Tax Increment Fund to such
municipality for deposit in the municipality's special tax
allocation fund an amount equal to the Net State Sales Tax
Increment and (2) authorize the Department of Revenue to
annually notify the municipality of the amount of the Municipal
Sales Tax Increment which shall be deposited by the
municipality in the municipality's special tax allocation
fund. Provided that for purposes of this Section no amendments
adding additional area to the redevelopment project area which
has been certified as the State Sales Tax Boundary shall be
taken into account if such amendments are adopted by the
municipality after January 1, 1987. If an amendment is adopted
which decreases the area of a State Sales Tax Boundary, the
municipality shall update the list required by subsection
(3)(a) of this Section. The Retailers' Occupation Tax
liability, Use Tax liability, Service Occupation Tax liability
and Service Use Tax liability for retailers and servicemen
located within the disconnected area shall be excluded from the
base from which tax increments are calculated and the revenue
from any such retailer or serviceman shall not be included in
calculating incremental revenue payable to the municipality. A
municipality adopting an ordinance under this subsection (1) of

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this Section for a redevelopment project area which is
certified as a State Sales Tax Boundary shall not be entitled
to payments of State taxes authorized under subsection (2) of
this Section for the same redevelopment project area. Nothing
herein shall be construed to prevent a municipality from
receiving payment of State taxes authorized under subsection
(2) of this Section for a separate redevelopment project area
that does not overlap in any way with the State Sales Tax
Boundary receiving payments of State taxes pursuant to
subsection (1) of this Section.
A certified copy of such ordinance shall be submitted by
the municipality to the Department of Commerce and Economic
Opportunity and the Department of Revenue not later than 30
days after the effective date of the ordinance. Upon submission
of the ordinances, and the information required pursuant to
subsection 3 of this Section, the Department of Revenue shall
promptly determine the amount of such taxes paid under the
Retailers' Occupation Tax Act, Use Tax Act, Service Use Tax
Act, the Service Occupation Tax Act, the Municipal Retailers'
Occupation Tax Act and the Municipal Service Occupation Tax Act
by retailers and servicemen on transactions at places located
in the redevelopment project area during the base year, and
shall certify all the foregoing "initial sales tax amounts" to
the municipality within 60 days of submission of the list
required of subsection (3)(a) of this Section.
If a retailer or serviceman with a place of business

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located within a redevelopment project area also has one or
more other places of business within the municipality but
outside the redevelopment project area, the retailer or
serviceman shall, upon request of the Department of Revenue,
certify to the Department of Revenue the amount of taxes paid
pursuant to the Retailers' Occupation Tax Act, the Municipal
Retailers' Occupation Tax Act, the Service Occupation Tax Act
and the Municipal Service Occupation Tax Act at each place of
business which is located within the redevelopment project area
in the manner and for the periods of time requested by the
Department of Revenue.
When the municipality determines that a portion of an
increase in the aggregate amount of taxes paid by retailers and
servicemen under the Retailers' Occupation Tax Act, Use Tax
Act, Service Use Tax Act, or the Service Occupation Tax Act is
the result of a retailer or serviceman initiating retail or
service operations in the redevelopment project area by such
retailer or serviceman with a resulting termination of retail
or service operations by such retailer or serviceman at another
location in Illinois in the standard metropolitan statistical
area of such municipality, the Department of Revenue shall be
notified that the retailers occupation tax liability, use tax
liability, service occupation tax liability, or service use tax
liability from such retailer's or serviceman's terminated
operation shall be included in the base Initial Sales Tax
Amounts from which the State Sales Tax Increment is calculated

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for purposes of State payments to the affected municipality;
provided, however, for purposes of this paragraph
"termination" shall mean a closing of a retail or service
operation which is directly related to the opening of the same
retail or service operation in a redevelopment project area
which is included within a State Sales Tax Boundary, but it
shall not include retail or service operations closed for
reasons beyond the control of the retailer or serviceman, as
determined by the Department.
If the municipality makes the determination referred to in
the prior paragraph and notifies the Department and if the
relocation is from a location within the municipality, the
Department, at the request of the municipality, shall adjust
the certified aggregate amount of taxes that constitute the
Municipal Sales Tax Increment paid by retailers and servicemen
on transactions at places of business located within the State
Sales Tax Boundary during the base year using the same
procedures as are employed to make the adjustment referred to
in the prior paragraph. The adjusted Municipal Sales Tax
Increment calculated by the Department shall be sufficient to
satisfy the requirements of subsection (1) of this Section.
When a municipality which has adopted tax increment
allocation financing in 1986 determines that a portion of the
aggregate amount of taxes paid by retailers and servicemen
under the Retailers Occupation Tax Act, Use Tax Act, Service
Use Tax Act, or Service Occupation Tax Act, the Municipal

HB1589 - 102 - LRB101 06664 AWJ 51691 b
Retailers' Occupation Tax Act and the Municipal Service
Occupation Tax Act, includes revenue of a retailer or
serviceman which terminated retailer or service operations in
1986, prior to the adoption of tax increment allocation
financing, the Department of Revenue shall be notified by such
municipality that the retailers' occupation tax liability, use
tax liability, service occupation tax liability or service use
tax liability, from such retailer's or serviceman's terminated
operations shall be excluded from the Initial Sales Tax Amounts
for such taxes. The revenue from any such retailer or
serviceman which is excluded from the base year under this
paragraph, shall not be included in calculating incremental
revenues if such retailer or serviceman reestablishes such
business in the redevelopment project area.
For State fiscal year 1992, the Department of Revenue shall
budget, and the Illinois General Assembly shall appropriate
from the Illinois Tax Increment Fund in the State treasury, an
amount not to exceed $18,000,000 to pay to each eligible
municipality the Net State Sales Tax Increment to which such
municipality is entitled.
Beginning on January 1, 1993, each municipality's
proportional share of the Illinois Tax Increment Fund shall be
determined by adding the annual Net State Sales Tax Increment
and the annual Net Utility Tax Increment to determine the
Annual Total Increment. The ratio of the Annual Total Increment
of each municipality to the Annual Total Increment for all

HB1589 - 103 - LRB101 06664 AWJ 51691 b
municipalities, as most recently calculated by the Department,
shall determine the proportional shares of the Illinois Tax
Increment Fund to be distributed to each municipality.
Beginning in October, 1993, and each January, April, July
and October thereafter, the Department of Revenue shall certify
to the Treasurer and the Comptroller the amounts payable
quarter annually during the fiscal year to each municipality
under this Section. The Comptroller shall promptly then draw
warrants, ordering the State Treasurer to pay such amounts from
the Illinois Tax Increment Fund in the State treasury.
The Department of Revenue shall utilize the same periods
established for determining State Sales Tax Increment to
determine the Municipal Sales Tax Increment for the area within
a State Sales Tax Boundary and certify such amounts to such
municipal treasurer who shall transfer such amounts to the
special tax allocation fund.
The provisions of this subsection (1) do not apply to
additional municipal retailers' occupation or service
occupation taxes imposed by municipalities using their home
rule powers or imposed pursuant to Sections 8-11-1.3, 8-11-1.4
and 8-11-1.5 of this Act. A municipality shall not receive from
the State any share of the Illinois Tax Increment Fund unless
such municipality deposits all its Municipal Sales Tax
Increment and the local incremental real property tax revenues,
as provided herein, into the appropriate special tax allocation
fund. If, however, a municipality has extended the estimated

HB1589 - 104 - LRB101 06664 AWJ 51691 b
dates of completion of the redevelopment project and retirement
of obligations to finance redevelopment project costs by
municipal ordinance to December 31, 2013 under subsection (n)
of Section 11-74.4-3, then that municipality shall continue to
receive from the State a share of the Illinois Tax Increment
Fund so long as the municipality deposits, from any funds
available, excluding funds in the special tax allocation fund,
an amount equal to the municipal share of the real property tax
increment revenues into the special tax allocation fund during
the extension period. The amount to be deposited by the
municipality in each of the tax years affected by the extension
to December 31, 2013 shall be equal to the municipal share of
the property tax increment deposited into the special tax
allocation fund by the municipality for the most recent year
that the property tax increment was distributed. A municipality
located within an economic development project area created
under the County Economic Development Project Area Property Tax
Allocation Act which has abated any portion of its property
taxes which otherwise would have been deposited in its special
tax allocation fund shall not receive from the State the Net
Sales Tax Increment.
(2) A municipality which has adopted tax increment
allocation financing with regard to an industrial park or
industrial park conservation area, prior to January 1, 1988,
may by ordinance authorize the Department of Revenue to
annually certify and pay from the Illinois Tax Increment Fund

HB1589 - 105 - LRB101 06664 AWJ 51691 b
to such municipality for deposit in the municipality's special
tax allocation fund an amount equal to the Net State Utility
Tax Increment. Provided that for purposes of this Section no
amendments adding additional area to the redevelopment project
area shall be taken into account if such amendments are adopted
by the municipality after January 1, 1988. Municipalities
adopting an ordinance under this subsection (2) of this Section
for a redevelopment project area shall not be entitled to
payment of State taxes authorized under subsection (1) of this
Section for the same redevelopment project area which is within
a State Sales Tax Boundary. Nothing herein shall be construed
to prevent a municipality from receiving payment of State taxes
authorized under subsection (1) of this Section for a separate
redevelopment project area within a State Sales Tax Boundary
that does not overlap in any way with the redevelopment project
area receiving payments of State taxes pursuant to subsection
(2) of this Section.
A certified copy of such ordinance shall be submitted to
the Department of Commerce and Economic Opportunity and the
Department of Revenue not later than 30 days after the
effective date of the ordinance.
When a municipality determines that a portion of an
increase in the aggregate amount of taxes paid by industrial or
commercial facilities under the Public Utilities Act, is the
result of an industrial or commercial facility initiating
operations in the redevelopment project area with a resulting

HB1589 - 106 - LRB101 06664 AWJ 51691 b
termination of such operations by such industrial or commercial
facility at another location in Illinois, the Department of
Revenue shall be notified by such municipality that such
industrial or commercial facility's liability under the Public
Utility Tax Act shall be included in the base from which tax
increments are calculated for purposes of State payments to the
affected municipality.
After receipt of the calculations by the public utility as
required by subsection (4) of this Section, the Department of
Revenue shall annually budget and the Illinois General Assembly
shall annually appropriate from the General Revenue Fund
through State Fiscal Year 1989, and thereafter from the
Illinois Tax Increment Fund, an amount sufficient to pay to
each eligible municipality the amount of incremental revenue
attributable to State electric and gas taxes as reflected by
the charges imposed on persons in the project area to which
such municipality is entitled by comparing the preceding
calendar year with the base year as determined by this Section.
Beginning on January 1, 1993, each municipality's proportional
share of the Illinois Tax Increment Fund shall be determined by
adding the annual Net State Utility Tax Increment and the
annual Net Utility Tax Increment to determine the Annual Total
Increment. The ratio of the Annual Total Increment of each
municipality to the Annual Total Increment for all
municipalities, as most recently calculated by the Department,
shall determine the proportional shares of the Illinois Tax

HB1589 - 107 - LRB101 06664 AWJ 51691 b
Increment Fund to be distributed to each municipality.
A municipality shall not receive any share of the Illinois
Tax Increment Fund from the State unless such municipality
imposes the maximum municipal charges authorized pursuant to
Section 9-221 of the Public Utilities Act and deposits all
municipal utility tax incremental revenues as certified by the
public utilities, and all local real estate tax increments into
such municipality's special tax allocation fund.
(3) Within 30 days after the adoption of the ordinance
required by either subsection (1) or subsection (2) of this
Section, the municipality shall transmit to the Department of
Commerce and Economic Opportunity and the Department of Revenue
the following:
(a) if applicable, a certified copy of the ordinance
required by subsection (1) accompanied by a complete list
of street names and the range of street numbers of each
street located within the redevelopment project area for
which payments are to be made under this Section in both
the base year and in the year preceding the payment year;
and the addresses of persons registered with the Department
of Revenue; and, the name under which each such retailer or
serviceman conducts business at that address, if different
from the corporate name; and the Illinois Business Tax
Number of each such person (The municipality shall update
this list in the event of a revision of the redevelopment
project area, or the opening or closing or name change of

HB1589 - 108 - LRB101 06664 AWJ 51691 b
any street or part thereof in the redevelopment project
area, or if the Department of Revenue informs the
municipality of an addition or deletion pursuant to the
monthly updates given by the Department.);
(b) if applicable, a certified copy of the ordinance
required by subsection (2) accompanied by a complete list
of street names and range of street numbers of each street
located within the redevelopment project area, the utility
customers in the project area, and the utilities serving
the redevelopment project areas;
(c) certified copies of the ordinances approving the
redevelopment plan and designating the redevelopment
project area;
(d) a copy of the redevelopment plan as approved by the
municipality;
(e) an opinion of legal counsel that the municipality
had complied with the requirements of this Act; and
(f) a certification by the chief executive officer of
the municipality that with regard to a redevelopment
project area: (1) the municipality has committed all of the
municipal tax increment created pursuant to this Act for
deposit in the special tax allocation fund, (2) the
redevelopment projects described in the redevelopment plan
would not be completed without the use of State incremental
revenues pursuant to this Act, (3) the municipality will
pursue the implementation of the redevelopment plan in an

HB1589 - 109 - LRB101 06664 AWJ 51691 b
expeditious manner, (4) the incremental revenues created
pursuant to this Section will be exclusively utilized for
the development of the redevelopment project area, and (5)
the increased revenue created pursuant to this Section
shall be used exclusively to pay redevelopment project
costs as defined in this Act.
(4) The Department of Revenue upon receipt of the
information set forth in paragraph (b) of subsection (3) shall
immediately forward such information to each public utility
furnishing natural gas or electricity to buildings within the
redevelopment project area. Upon receipt of such information,
each public utility shall promptly:
(a) provide to the Department of Revenue and the
municipality separate lists of the names and addresses of
persons within the redevelopment project area receiving
natural gas or electricity from such public utility. Such
list shall be updated as necessary by the public utility.
Each month thereafter the public utility shall furnish the
Department of Revenue and the municipality with an itemized
listing of charges imposed pursuant to Sections 9-221 and
9-222 of the Public Utilities Act on persons within the
redevelopment project area.
(b) determine the amount of charges imposed pursuant to
Sections 9-221 and 9-222 of the Public Utilities Act on
persons in the redevelopment project area during the base
year, both as a result of municipal taxes on electricity

HB1589 - 110 - LRB101 06664 AWJ 51691 b
and gas and as a result of State taxes on electricity and
gas and certify such amounts both to the municipality and
the Department of Revenue; and
(c) determine the amount of charges imposed pursuant to
Sections 9-221 and 9-222 of the Public Utilities Act on
persons in the redevelopment project area on a monthly
basis during the base year, both as a result of State and
municipal taxes on electricity and gas and certify such
separate amounts both to the municipality and the
Department of Revenue.
After the determinations are made in paragraphs (b) and
(c), the public utility shall monthly during the existence of
the redevelopment project area notify the Department of Revenue
and the municipality of any increase in charges over the base
year determinations made pursuant to paragraphs (b) and (c).
(5) The payments authorized under this Section shall be
deposited by the municipal treasurer in the special tax
allocation fund of the municipality, which for accounting
purposes shall identify the sources of each payment as:
municipal receipts from the State retailers occupation,
service occupation, use and service use taxes; and municipal
public utility taxes charged to customers under the Public
Utilities Act and State public utility taxes charged to
customers under the Public Utilities Act.
(6) Before the effective date of this amendatory Act of the
91st General Assembly, any municipality receiving payments

HB1589 - 111 - LRB101 06664 AWJ 51691 b
authorized under this Section for any redevelopment project
area or area within a State Sales Tax Boundary within the
municipality shall submit to the Department of Revenue and to
the taxing districts which are sent the notice required by
Section 6 of this Act annually within 180 days after the close
of each municipal fiscal year the following information for the
immediately preceding fiscal year:
(a) Any amendments to the redevelopment plan, the
redevelopment project area, or the State Sales Tax
Boundary.
(b) Audited financial statements of the special tax
allocation fund.
(c) Certification of the Chief Executive Officer of the
municipality that the municipality has complied with all of
the requirements of this Act during the preceding fiscal
year.
(d) An opinion of legal counsel that the municipality
is in compliance with this Act.
(e) An analysis of the special tax allocation fund
which sets forth:
(1) the balance in the special tax allocation fund
at the beginning of the fiscal year;
(2) all amounts deposited in the special tax
allocation fund by source;
(3) all expenditures from the special tax
allocation fund by category of permissible

HB1589 - 112 - LRB101 06664 AWJ 51691 b
redevelopment project cost; and
(4) for municipalities with a population less than
1,000,000, the balance in the special tax allocation
fund at the end of the fiscal year including a
breakdown of that balance by source. Such ending
balance shall be designated as surplus if it is not
required for anticipated redevelopment project costs
or to pay debt service on bonds issued to finance
redevelopment project costs, as set forth in Section
11-74.4-7 hereof.
(f) A description of all property purchased by the
municipality within the redevelopment project area
including:
1. Street address
2. Approximate size or description of property
3. Purchase price
4. Seller of property.
(g) A statement setting forth all activities
undertaken in furtherance of the objectives of the
redevelopment plan, including:
1. Any project implemented in the preceding fiscal
year
2. A description of the redevelopment activities
undertaken
3. A description of any agreements entered into by
the municipality with regard to the disposition or

HB1589 - 113 - LRB101 06664 AWJ 51691 b
redevelopment of any property within the redevelopment
project area or the area within the State Sales Tax
Boundary.
(h) With regard to any obligations issued by the
municipality:
1. copies of bond ordinances or resolutions
2. copies of any official statements
3. an analysis prepared by financial advisor or
underwriter setting forth: (a) nature and term of
obligation; and (b) projected debt service including
required reserves and debt coverage.
(i) A certified audit report reviewing compliance with
this statute performed by an independent public accountant
certified and licensed by the authority of the State of
Illinois. The financial portion of the audit must be
conducted in accordance with Standards for Audits of
Governmental Organizations, Programs, Activities, and
Functions adopted by the Comptroller General of the United
States (1981), as amended. The audit report shall contain a
letter from the independent certified public accountant
indicating compliance or noncompliance with the
requirements of subsection (q) of Section 11-74.4-3. If the
audit indicates that expenditures are not in compliance
with the law, the Department of Revenue shall withhold
State sales and utility tax increment payments to the
municipality until compliance has been reached, and an

HB1589 - 114 - LRB101 06664 AWJ 51691 b
amount equal to the ineligible expenditures has been
returned to the Special Tax Allocation Fund.
(6.1) After July 29, 1988 and before the effective date of
this amendatory Act of the 91st General Assembly, any funds
which have not been designated for use in a specific
development project in the annual report shall be designated as
surplus by municipalities with population of less than
1,000,000. No funds may be held in the Special Tax Allocation
Fund for more than 36 months from the date of receipt unless
the money is required for payment of contractual obligations
for specific development project costs. If held for more than
36 months in violation of the preceding sentence, such funds
shall be designated as surplus. Any funds designated as surplus
must first be used for early redemption of any bond
obligations. Any funds designated as surplus which are not
disposed of as otherwise provided in this paragraph, shall be
distributed as surplus as provided in Section 11-74.4-7. For
municipalities with a population greater than 1,000,000, when
such redevelopment projects costs, including without
limitation all municipal obligations financing redevelopment
project costs incurred under this Division, have been paid, all
surplus funds then remaining in the special tax allocation fund
shall be entirely used to pay costs of special education,
social service, and other costs of its public school district
as described in paragraph (12) of subsection (q) of Section
11-74.4-3.

HB1589 - 115 - LRB101 06664 AWJ 51691 b
(7) Any appropriation made pursuant to this Section for the
1987 State fiscal year shall not exceed the amount of $7
million and for the 1988 State fiscal year the amount of $10
million. The amount which shall be distributed to each
municipality shall be the incremental revenue to which each
municipality is entitled as calculated by the Department of
Revenue, unless the requests of the municipality exceed the
appropriation, then the amount to which each municipality shall
be entitled shall be prorated among the municipalities in the
same proportion as the increment to which the municipality
would be entitled bears to the total increment which all
municipalities would receive in the absence of this limitation,
provided that no municipality may receive an amount in excess
of 15% of the appropriation. For the 1987 Net State Sales Tax
Increment payable in Fiscal Year 1989, no municipality shall
receive more than 7.5% of the total appropriation; provided,
however, that any of the appropriation remaining after such
distribution shall be prorated among municipalities on the
basis of their pro rata share of the total increment. Beginning
on January 1, 1993, each municipality's proportional share of
the Illinois Tax Increment Fund shall be determined by adding
the annual Net State Sales Tax Increment and the annual Net
Utility Tax Increment to determine the Annual Total Increment.
The ratio of the Annual Total Increment of each municipality to
the Annual Total Increment for all municipalities, as most
recently calculated by the Department, shall determine the

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proportional shares of the Illinois Tax Increment Fund to be
distributed to each municipality.
(7.1) No distribution of Net State Sales Tax Increment to a
municipality for an area within a State Sales Tax Boundary
shall exceed in any State Fiscal Year an amount equal to 3
times the sum of the Municipal Sales Tax Increment, the real
property tax increment and deposits of funds from other
sources, excluding state and federal funds, as certified by the
city treasurer to the Department of Revenue for an area within
a State Sales Tax Boundary. After July 29, 1988, for those
municipalities which issue bonds between June 1, 1988 and 3
years from July 29, 1988 to finance redevelopment projects
within the area in a State Sales Tax Boundary, the distribution
of Net State Sales Tax Increment during the 16th through 20th
years from the date of issuance of the bonds shall not exceed
in any State Fiscal Year an amount equal to 2 times the sum of
the Municipal Sales Tax Increment, the real property tax
increment and deposits of funds from other sources, excluding
State and federal funds.
(8) Any person who knowingly files or causes to be filed
false information for the purpose of increasing the amount of
any State tax incremental revenue commits a Class A
misdemeanor.
(9) The following procedures shall be followed to determine
whether municipalities have complied with the Act for the
purpose of receiving distributions after July 1, 1989 pursuant

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to subsection (1) of this Section 11-74.4-8a.
(a) The Department of Revenue shall conduct a
preliminary review of the redevelopment project areas and
redevelopment plans pertaining to those municipalities
receiving payments from the State pursuant to subsection
(1) of Section 8a of this Act for the purpose of
determining compliance with the following standards:
(1) For any municipality with a population of more
than 12,000 as determined by the 1980 U.S. Census: (a)
the redevelopment project area, or in the case of a
municipality which has more than one redevelopment
project area, each such area, must be contiguous and
the total of all such areas shall not comprise more
than 25% of the area within the municipal boundaries
nor more than 20% of the equalized assessed value of
the municipality; (b) the aggregate amount of 1985
taxes in the redevelopment project area, or in the case
of a municipality which has more than one redevelopment
project area, the total of all such areas, shall be not
more than 25% of the total base year taxes paid by
retailers and servicemen on transactions at places of
business located within the municipality under the
Retailers' Occupation Tax Act, the Use Tax Act, the
Service Use Tax Act, and the Service Occupation Tax
Act. Redevelopment project areas created prior to 1986
are not subject to the above standards if their

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boundaries were not amended in 1986.
(2) For any municipality with a population of
12,000 or less as determined by the 1980 U.S. Census:
(a) the redevelopment project area, or in the case of a
municipality which has more than one redevelopment
project area, each such area, must be contiguous and
the total of all such areas shall not comprise more
than 35% of the area within the municipal boundaries
nor more than 30% of the equalized assessed value of
the municipality; (b) the aggregate amount of 1985
taxes in the redevelopment project area, or in the case
of a municipality which has more than one redevelopment
project area, the total of all such areas, shall not be
more than 35% of the total base year taxes paid by
retailers and servicemen on transactions at places of
business located within the municipality under the
Retailers' Occupation Tax Act, the Use Tax Act, the
Service Use Tax Act, and the Service Occupation Tax
Act. Redevelopment project areas created prior to 1986
are not subject to the above standards if their
boundaries were not amended in 1986.
(3) Such preliminary review of the redevelopment
project areas applying the above standards shall be
completed by November 1, 1988, and on or before
November 1, 1988, the Department shall notify each
municipality by certified mail, return receipt

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requested that either (1) the Department requires
additional time in which to complete its preliminary
review; or (2) the Department is issuing either (a) a
Certificate of Eligibility or (b) a Notice of Review.
If the Department notifies a municipality that it
requires additional time to complete its preliminary
investigation, it shall complete its preliminary
investigation no later than February 1, 1989, and by
February 1, 1989 shall issue to each municipality
either (a) a Certificate of Eligibility or (b) a Notice
of Review. A redevelopment project area for which a
Certificate of Eligibility has been issued shall be
deemed a "State Sales Tax Boundary."
(4) The Department of Revenue shall also issue a
Notice of Review if the Department has received a
request by November 1, 1988 to conduct such a review
from taxpayers in the municipality, local taxing
districts located in the municipality or the State of
Illinois, or if the redevelopment project area has more
than 5 retailers and has had growth in State sales tax
revenue of more than 15% from calendar year 1985 to
1986.
(b) For those municipalities receiving a Notice of
Review, the Department will conduct a secondary review
consisting of: (i) application of the above standards
contained in subsection (9)(a)(1)(a) and (b) or

HB1589 - 120 - LRB101 06664 AWJ 51691 b
(9)(a)(2)(a) and (b), and (ii) the definitions of blighted
and conservation area provided for in Section 11-74.4-3.
Such secondary review shall be completed by July 1, 1989.
Upon completion of the secondary review, the
Department will issue (a) a Certificate of Eligibility or
(b) a Preliminary Notice of Deficiency. Any municipality
receiving a Preliminary Notice of Deficiency may amend its
redevelopment project area to meet the standards and
definitions set forth in this paragraph (b). This amended
redevelopment project area shall become the "State Sales
Tax Boundary" for purposes of determining the State Sales
Tax Increment.
(c) If the municipality advises the Department of its
intent to comply with the requirements of paragraph (b) of
this subsection outlined in the Preliminary Notice of
Deficiency, within 120 days of receiving such notice from
the Department, the municipality shall submit
documentation to the Department of the actions it has taken
to cure any deficiencies. Thereafter, within 30 days of the
receipt of the documentation, the Department shall either
issue a Certificate of Eligibility or a Final Notice of
Deficiency. If the municipality fails to advise the
Department of its intent to comply or fails to submit
adequate documentation of such cure of deficiencies the
Department shall issue a Final Notice of Deficiency that
provides that the municipality is ineligible for payment of

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the Net State Sales Tax Increment.
(d) If the Department issues a final determination of
ineligibility, the municipality shall have 30 days from the
receipt of determination to protest and request a hearing.
Such hearing shall be conducted in accordance with Sections
10-25, 10-35, 10-40, and 10-50 of the Illinois
Administrative Procedure Act. The decision following the
hearing shall be subject to review under the Administrative
Review Law.
(e) Any Certificate of Eligibility issued pursuant to
this subsection 9 shall be binding only on the State for
the purposes of establishing municipal eligibility to
receive revenue pursuant to subsection (1) of this Section
11-74.4-8a.
(f) It is the intent of this subsection that the
periods of time to cure deficiencies shall be in addition
to all other periods of time permitted by this Section,
regardless of the date by which plans were originally
required to be adopted. To cure said deficiencies, however,
the municipality shall be required to follow the procedures
and requirements pertaining to amendments, as provided in
Sections 11-74.4-5 and 11-74.4-6 of this Act.
(10) If a municipality adopts a State Sales Tax Boundary in
accordance with the provisions of subsection (9) of this
Section, such boundaries shall subsequently be utilized to
determine Revised Initial Sales Tax Amounts and the Net State

HB1589 - 122 - LRB101 06664 AWJ 51691 b
Sales Tax Increment; provided, however, that such revised State
Sales Tax Boundary shall not have any effect upon the boundary
of the redevelopment project area established for the purposes
of determining the ad valorem taxes on real property pursuant
to Sections 11-74.4-7 and 11-74.4-8 of this Act nor upon the
municipality's authority to implement the redevelopment plan
for that redevelopment project area. For any redevelopment
project area with a smaller State Sales Tax Boundary within its
area, the municipality may annually elect to deposit the
Municipal Sales Tax Increment for the redevelopment project
area in the special tax allocation fund and shall certify the
amount to the Department prior to receipt of the Net State
Sales Tax Increment. Any municipality required by subsection
(9) to establish a State Sales Tax Boundary for one or more of
its redevelopment project areas shall submit all necessary
information required by the Department concerning such
boundary and the retailers therein, by October 1, 1989, after
complying with the procedures for amendment set forth in
Sections 11-74.4-5 and 11-74.4-6 of this Act. Net State Sales
Tax Increment produced within the State Sales Tax Boundary
shall be spent only within that area. However expenditures of
all municipal property tax increment and municipal sales tax
increment in a redevelopment project area are not required to
be spent within the smaller State Sales Tax Boundary within
such redevelopment project area.
(11) The Department of Revenue shall have the authority to

HB1589 - 123 - LRB101 06664 AWJ 51691 b
issue rules and regulations for purposes of this Section.
(12) If, under Section 5.4.1 of the Illinois Enterprise
Zone Act, a municipality determines that property that lies
within a State Sales Tax Boundary has an improvement,
rehabilitation, or renovation that is entitled to a property
tax abatement, then that property along with any improvements,
rehabilitation, or renovations shall be immediately removed
from any State Sales Tax Boundary. The municipality that made
the determination shall notify the Department of Revenue within
30 days after the determination. Once a property is removed
from the State Sales Tax Boundary because of the existence of a
property tax abatement resulting from an enterprise zone, then
that property shall not be permitted to be amended into a State
Sales Tax Boundary.
(Source: P.A. 100-201, eff. 8-18-17.)