Bill Text: IL HB1646 | 2023-2024 | 103rd General Assembly | Introduced

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Bill Title: Amends the Tax Increment Allocation Redevelopment Act in the Illinois Municipal Code. Provides that moneys in the special tax allocation fund may be used to make distributions to certain taxing districts. Provides that moneys received from the additional distributions may be used by the affected taxing district to pay debt service on obligations incurred by the taxing district and to provide property tax relief. Effective immediately.

Spectrum: Partisan Bill (Republican 2-0)

Status: (Introduced) 2024-04-05 - Rule 19(a) / Re-referred to Rules Committee [HB1646 Detail]

Download: Illinois-2023-HB1646-Introduced.html

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103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB1646 Introduced , by Rep. Blaine Wilhour SYNOPSIS AS INTRODUCED:
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
Amends the Tax Increment Allocation Redevelopment Act in the Illinois Municipal Code. Provides that moneys in the special tax allocation fund may be used to make distributions to certain taxing districts. Provides that moneys received from the additional distributions may be used by the affected taxing district to pay debt service on obligations incurred by the taxing district and to provide property tax relief. Effective immediately.
LRB103 05742 AWJ 50762 b
A BILL FOR
HB1646 LRB103 05742 AWJ 50762 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 11-74.4-7 and 11-74.4-8 as follows:
(65 ILCS 5/11-74.4-7) (from Ch. 24, par. 11-74.4-7)
Sec. 11-74.4-7. Special tax allocation fund; obligations.
(a) 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 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. 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,

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earmarked, distributed as provided in subsection (b), 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 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 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

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project area.
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
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

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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
(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

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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 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

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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
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

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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.
(b) Prior to the distribution of any surplus funds under
subsection (a), a municipality may make additional
distributions from the special tax allocation fund to any
affected taxing district, provided that the total amount of
such additional distributions may not cause the balance in the
special tax allocation fund to be less than the amount pledged
to pay obligations secured by the special tax allocation fund.
If an additional distribution is made under this subsection,
the moneys may be used by the affected taxing district to pay
debt service on obligations incurred by the taxing district
and to provide property tax relief as provided in this
subsection. Prior to receiving additional distributions under
this Section, the affected taxing district may enter into an
intergovernmental agreement with the municipality and may
agree to reduce the amount of its property tax levy for the
levy year in which the distributions are received by an amount
that is not less than the total amount of additional
distributions received during the taxable year.
As used in this subsection, "affected taxing district"

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means any of the following units that have the authority to
directly levy taxes on the property within the redevelopment
project area: a community college district; school district;
park district; library district; township; fire protection
district; or county.
(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
municipality may not adopt tax increment financing in a
redevelopment project area after July 30, 1997 (the effective
date of Public Act 90-258) 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

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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, 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

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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 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,
tract, 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:

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(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 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

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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 refund shall be limited to the amount of the
overpayment.
It is the intent of this Division that after July 29,
1988 (the effective date of Public Act 85-1142) 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:

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(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.
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

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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
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

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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
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

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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 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.
When such redevelopment projects costs, including,
without limitation, all municipal obligations financing
redevelopment project costs incurred under this Division,
have been paid and all distributions under subsection (b)
of Section 11-74.4-7 have been made, all surplus funds
then remaining in the special tax allocation fund shall be
distributed by being paid by the municipal treasurer to

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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
the county collector to the affected districts of real
property taxes from real property in the redevelopment
project area.
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

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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 municipality extends estimated
dates of completion of a redevelopment project and
retirement of obligations to finance a redevelopment
project, as allowed by Public Act 87-1272, 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

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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
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

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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
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

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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. 102-558, eff. 8-20-21.)
Section 99. Effective date. This Act takes effect upon
becoming law.