Bill Text: IL HB2686 | 2025-2026 | 104th General Assembly | Introduced

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Bill Title: Amends the State Finance Act and the State Revenue Sharing Act. Provides that certain provisions concerning distributions from the State and Local Sales Tax Reform Fund and from the Local Government Distributive Fund constitute an irrevocable and continuing appropriation. Effective immediately.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced) 2025-02-06 - Referred to Rules Committee [HB2686 Detail]

Download: Illinois-2025-HB2686-Introduced.html

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104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 HB2686 Introduced , by Rep. William "Will" Davis SYNOPSIS AS INTRODUCED:
30 ILCS 105/6z-17 from Ch. 127, par. 142z-17
30 ILCS 115/1 from Ch. 85, par. 611
30 ILCS 115/2 from Ch. 85, par. 612
Amends the State Finance Act and the State Revenue Sharing Act. Provides that certain provisions concerning distributions from the State and Local Sales Tax Reform Fund and from the Local Government Distributive Fund constitute an irrevocable and continuing appropriation. Effective immediately.
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A BILL FOR
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AN ACT concerning revenue.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The State Finance Act is amended by changing
Section 6z-17 as follows:
(30 ILCS 105/6z-17) (from Ch. 127, par. 142z-17)
Sec. 6z-17. State and Local Sales Tax Reform Fund.
(a) After deducting the amount transferred to the Tax
Compliance and Administration Fund under subsection (b), of
the money paid into the State and Local Sales Tax Reform Fund:
(i) subject to appropriation to the Department of Revenue,
Municipalities having 1,000,000 or more inhabitants shall
receive 20% and may expend such amount to fund and establish a
program for developing and coordinating public and private
resources targeted to meet the affordable housing needs of
low-income and very low-income households within such
municipality, (ii) 10% shall be transferred into the Regional
Transportation Authority Occupation and Use Tax Replacement
Fund, a special fund in the State treasury which is hereby
created, (iii) until July 1, 2013, subject to appropriation to
the Department of Transportation, the Madison County Mass
Transit District shall receive .6%, and beginning on July 1,
2013, subject to appropriation to the Department of Revenue,

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0.6% shall be distributed by the Department of Revenue each
month out of the Fund to the Madison County Mass Transit
District, (iv) the following amounts, plus any cumulative
deficiency in such transfers for prior months, shall be
transferred monthly into the Build Illinois Fund and credited
to the Build Illinois Bond Account therein:
Fiscal Year Amount
1990 $2,700,000
1991 1,850,000
1992 2,750,000
1993 2,950,000
From Fiscal Year 1994 through Fiscal Year 2025 the
transfer shall total $3,150,000 monthly, plus any cumulative
deficiency in such transfers for prior months, and (v) the
remainder of the money paid into the State and Local Sales Tax
Reform Fund shall be transferred into the Local Government
Distributive Fund and, except for municipalities with
1,000,000 or more inhabitants which shall receive no portion
of such remainder, shall be distributed, subject to
appropriation, in the manner provided by Section 2 of the
State Revenue Sharing Act "An Act in relation to State revenue
sharing with local government entities", approved July 31,
1969, as now or hereafter amended. Municipalities with more
than 50,000 inhabitants according to the 1980 U.S. Census and
located within the Metro East Mass Transit District receiving
funds pursuant to provision (v) of this paragraph may expend

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such amounts to fund and establish a program for developing
and coordinating public and private resources targeted to meet
the affordable housing needs of low-income and very low-income
households within such municipality.
Moneys transferred from the Grocery Tax Replacement Fund
to the State and Local Sales Tax Reform Fund under Section
6z-130 shall be treated under this Section in the same manner
as if they had been remitted with the return on which they were
reported.
(b) Beginning on the first day of the first calendar month
to occur on or after the effective date of this amendatory Act
of the 98th General Assembly, each month the Department of
Revenue shall certify to the State Comptroller and the State
Treasurer, and the State Comptroller shall order transferred
and the State Treasurer shall transfer from the State and
Local Sales Tax Reform Fund to the Tax Compliance and
Administration Fund, an amount equal to 1/12 of 5% of 20% of
the cash receipts collected during the preceding fiscal year
by the Audit Bureau of the Department of Revenue under the Use
Tax Act, the Service Use Tax Act, the Service Occupation Tax
Act, the Retailers' Occupation Tax Act, and associated local
occupation and use taxes administered by the Department. The
amount distributed under subsection (a) each month shall first
be reduced by the amount transferred to the Tax Compliance and
Administration Fund under this subsection (b). Moneys
transferred to the Tax Compliance and Administration Fund

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under this subsection (b) shall be used, subject to
appropriation, to fund additional auditors and compliance
personnel at the Department of Revenue.
(c) The provisions of this Section directing the
distributions from the State and Local Sales Tax Reform Fund,
including, but not limited to, amounts that are distributed in
the manner provided by Section 2 of the State Revenue Sharing
Act, shall constitute an irrevocable and continuing
appropriation of all amounts as provided in this Section. The
State Treasurer and State Comptroller are hereby authorized to
make distributions as provided in this Section.
(Source: P.A. 102-700, eff. 4-19-22.)
Section 10. The State Revenue Sharing Act is amended by
changing Sections 1 and 2 as follows:
(30 ILCS 115/1) (from Ch. 85, par. 611)
Sec. 1. Local Government Distributive Fund. Through June
30, 1994, as soon as may be after the first day of each month
the Department of Revenue shall certify to the Treasurer an
amount equal to 1/12 of the net revenue realized from the tax
imposed by subsections (a) and (b) of Section 201 of the
Illinois Income Tax Act during the preceding month. Beginning
July 1, 1994, and continuing through June 30, 1995, as soon as
may be after the first day of each month, the Department of
Revenue shall certify to the Treasurer an amount equal to 1/11

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of the net revenue realized from the tax imposed by
subsections (a) and (b) of Section 201 of the Illinois Income
Tax Act during the preceding month. Beginning July 1, 1995, as
soon as may be after the first day of each month, the
Department of Revenue shall certify to the Treasurer an amount
equal to the amounts calculated pursuant to subsection (b) of
Section 901 of the Illinois Income Tax Act based on the net
revenue realized from the tax imposed by subsections (a) and
(b) of Section 201 of the Illinois Income Tax Act during the
preceding month. Net revenue realized for a month shall be
defined as the revenue from the tax imposed by subsections (a)
and (b) of Section 201 of the Illinois Income Tax Act which is
deposited in the General Revenue Fund, the Education
Assistance Fund and the Income Tax Surcharge Local Government
Distributive Fund during the month minus the amount paid out
of the General Revenue Fund in State warrants during that same
month as refunds to taxpayers for overpayment of liability
under the tax imposed by subsections (a) and (b) of Section 201
of the Illinois Income Tax Act. Upon receipt of such
certification, the Treasurer shall transfer from the General
Revenue Fund to a special fund in the State treasury, to be
known as the "Local Government Distributive Fund", the amount
shown on such certification.
Beginning on the effective date of this amendatory Act of
the 98th General Assembly, the Comptroller shall perform the
transfers required by this Section no later than 60 days after

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he or she receives the certification from the Treasurer.
This Section constitutes an irrevocable and continuing
appropriation of all All amounts that are paid into the Local
Government Distributive Fund in accordance with this Section
or from any other other source and that are allocated pursuant
to this Act are appropriated on a continuing basis. The State
Treasurer and State Comptroller are hereby authorized to make
distributions as provided in this Act.
(Source: P.A. 98-1052, eff. 8-26-14.)
(30 ILCS 115/2) (from Ch. 85, par. 612)
Sec. 2. Allocation and Disbursement.
(a) As soon as may be after the first day of each month,
the Department of Revenue shall allocate among the several
municipalities and counties of this State the amount available
in the Local Government Distributive Fund and in the Income
Tax Surcharge Local Government Distributive Fund, determined
as provided in Sections 1 and 1a above. Except as provided in
Sections 13 and 13.1 of this Act, the Department shall then
certify such allocations to the State Comptroller, who shall
pay over to the several municipalities and counties the
respective amounts allocated to them. The amount of such Funds
allocable to each such municipality and county shall be in
proportion to the number of individual residents of such
municipality or county to the total population of the State,
determined in each case on the basis of the latest census of

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the State, municipality or county conducted by the Federal
government and certified by the Secretary of State and for
annexations to municipalities, the latest Federal, State or
municipal census of the annexed area which has been certified
by the Department of Revenue. Allocations to the City of
Chicago under this Section are subject to Section 6 of the
Hotel Operators' Occupation Tax Act. For the purpose of this
Section, the number of individual residents of a county shall
be reduced by the number of individuals residing therein in
municipalities, but the number of individual residents of the
State, county and municipality shall reflect the latest census
of any of them. The amounts transferred into the Local
Government Distributive Fund pursuant to Section 9 of the Use
Tax Act, Section 9 of the Service Use Tax Act, Section 9 of the
Service Occupation Tax Act, and Section 3 of the Retailers'
Occupation Tax Act, each as now or hereafter amended, pursuant
to the amendments of such Sections by Public Act 85-1135,
shall be distributed as provided in said Sections.
(b) It is the intent of the General Assembly that
allocations made under this Section shall be made in a fair and
equitable manner. Accordingly, the clerk of any municipality
to which territory has been annexed, or from which territory
has been disconnected, shall notify the Department of Revenue
in writing of that annexation or disconnection and shall (1)
state the number of residents within the territory that was
annexed or disconnected, based on the last census conducted by

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the federal, State, or municipal government and certified by
the Illinois Secretary of State, and (2) furnish therewith a
certified copy of the plat of annexation or, in the case of
disconnection, the ordinance, final judgment, or resolution of
disconnection together with an accurate depiction of the
territory disconnected. The county in which the annexed or
disconnected territory is located shall verify that the number
of residents stated on the written notice that is to be sent to
the Department of Revenue is true and accurate. The verified
statement of the county shall accompany the written notice.
However, if the county does not respond to the municipality's
request for verification within 30 days, this verification
requirement shall be waived. The written notice shall be
provided to the Department of Revenue (1) within 30 days after
the effective date of this amendatory Act of the 96th General
Assembly for disconnections occurring after January 1, 2007
and before the effective date of this amendatory Act of the
96th General Assembly or (2) within 30 days after the
annexation or disconnection for annexations or disconnections
occurring on or after the effective date of this amendatory
Act of the 96th General Assembly. For purposes of this
Section, a disconnection or annexation through court order is
deemed to be effective 30 days after the entry of a final
judgment order, unless stayed pending appeal. Thereafter, the
monthly allocation made to the municipality and to any other
municipality or county affected by the annexation or

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disconnection shall be adjusted in accordance with this
Section to reflect the change in residency of the residents of
the territory that was annexed or disconnected. The adjustment
shall be made no later than 30 days after the Department of
Revenue's receipt of the written notice of annexation or
disconnection described in this Section.
(Source: P.A. 96-1040, eff. 7-14-10.)
Section 99. Effective date. This Act takes effect upon
becoming law.