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
 
HB2686LRB104 03444 HLH 13467 b


1    AN ACT concerning revenue.

2    Be it enacted by the People of the State of Illinois, 
3represented in the General Assembly:

4    Section 5. The State Finance Act is amended by changing 
5Section 6z-17 as follows:

6    (30 ILCS 105/6z-17)    (from Ch. 127, par. 142z-17)
7    Sec. 6z-17. State and Local Sales Tax Reform Fund.     
8    (a) After deducting the amount transferred to the Tax 
9Compliance and Administration Fund under subsection (b), of 
10the money paid into the State and Local Sales Tax Reform Fund: 
11(i) subject to appropriation to the Department of Revenue,    
12Municipalities having 1,000,000 or more inhabitants shall 
13receive 20% and may expend such amount to fund and establish a 
14program for developing and coordinating public and private 
15resources targeted to meet the affordable housing needs of 
16low-income and very low-income households within such 
17municipality, (ii) 10% shall be transferred into the Regional 
18Transportation Authority Occupation and Use Tax Replacement 
19Fund, a special fund in the State treasury which is hereby 
20created, (iii) until July 1, 2013, subject to appropriation to 
21the Department of Transportation, the Madison County Mass 
22Transit District shall receive .6%, and beginning on July 1, 
232013, subject to appropriation to the Department of Revenue,    
 
 
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10.6% shall be distributed by the Department of Revenue each 
2month out of the Fund to the Madison County Mass Transit 
3District, (iv) the following amounts, plus any cumulative 
4deficiency in such transfers for prior months, shall be 
5transferred monthly into the Build Illinois Fund and credited 
6to the Build Illinois Bond Account therein:
7Fiscal YearAmount
81990$2,700,000
919911,850,000
1019922,750,000
1119932,950,000
12    From Fiscal Year 1994 through Fiscal Year 2025 the 
13transfer shall total $3,150,000 monthly, plus any cumulative 
14deficiency in such transfers for prior months, and (v) the 
15remainder of the money paid into the State and Local Sales Tax 
16Reform Fund shall be transferred into the Local Government 
17Distributive Fund and, except for municipalities with 
181,000,000 or more inhabitants which shall receive no portion 
19of such remainder, shall be distributed, subject to 
20appropriation, in the manner provided by Section 2 of the 
21State Revenue Sharing Act "An Act in relation to State revenue 
22sharing with local government entities", approved July 31, 
231969, as now or hereafter amended. Municipalities with more 
24than 50,000 inhabitants according to the 1980 U.S. Census and 
25located within the Metro East Mass Transit District receiving 
26funds pursuant to provision (v) of this paragraph may expend 
 
 
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1such amounts to fund and establish a program for developing 
2and coordinating public and private resources targeted to meet 
3the affordable housing needs of low-income and very low-income 
4households within such municipality.
5    Moneys transferred from the Grocery Tax Replacement Fund 
6to the State and Local Sales Tax Reform Fund under Section 
76z-130 shall be treated under this Section in the same manner 
8as if they had been remitted with the return on which they were 
9reported. 
10    (b) Beginning on the first day of the first calendar month 
11to occur on or after the effective date of this amendatory Act 
12of the 98th General Assembly, each month the Department of 
13Revenue shall certify to the State Comptroller and the State 
14Treasurer, and the State Comptroller shall order transferred 
15and the State Treasurer shall transfer from the State and 
16Local Sales Tax Reform Fund to the Tax Compliance and 
17Administration Fund, an amount equal to 1/12 of 5% of 20% of 
18the cash receipts collected during the preceding fiscal year 
19by the Audit Bureau of the Department of Revenue under the Use 
20Tax Act, the Service Use Tax Act, the Service Occupation Tax 
21Act, the Retailers' Occupation Tax Act, and associated local 
22occupation and use taxes administered by the Department. The 
23amount distributed under subsection (a) each month shall first 
24be reduced by the amount transferred to the Tax Compliance and 
25Administration Fund under this subsection (b). Moneys 
26transferred to the Tax Compliance and Administration Fund 
 
 
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1under this subsection (b) shall be used, subject to 
2appropriation, to fund additional auditors and compliance 
3personnel at the Department of Revenue. 
4    (c) The provisions of this Section directing the 
5distributions from the State and Local Sales Tax Reform Fund, 
6including, but not limited to, amounts that are distributed in 
7the manner provided by Section 2 of the State Revenue Sharing 
8Act, shall constitute an irrevocable and continuing 
9appropriation of all amounts as provided in this Section. The 
10State Treasurer and State Comptroller are hereby authorized to 
11make distributions as provided in this Section.    
12(Source: P.A. 102-700, eff. 4-19-22.)

13    Section 10. The State Revenue Sharing Act is amended by 
14changing Sections 1 and 2 as follows:

15    (30 ILCS 115/1)    (from Ch. 85, par. 611)
16    Sec. 1. Local Government Distributive Fund. Through June 
1730, 1994, as soon as may be after the first day of each month 
18the Department of Revenue shall certify to the Treasurer an 
19amount equal to 1/12 of the net revenue realized from the tax 
20imposed by subsections (a) and (b) of Section 201 of the 
21Illinois Income Tax Act during the preceding month. Beginning 
22July 1, 1994, and continuing through June 30, 1995, as soon as 
23may be after the first day of each month, the Department of 
24Revenue shall certify to the Treasurer an amount equal to 1/11 
 
 
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1of the net revenue realized from the tax imposed by 
2subsections (a) and (b) of Section 201 of the Illinois Income 
3Tax Act during the preceding month. Beginning July 1, 1995, as 
4soon as may be after the first day of each month, the 
5Department of Revenue shall certify to the Treasurer an amount 
6equal to the amounts calculated pursuant to subsection (b) of 
7Section 901 of the Illinois Income Tax Act based on the net 
8revenue realized from the tax imposed by subsections (a) and 
9(b) of Section 201 of the Illinois Income Tax Act during the 
10preceding month. Net revenue realized for a month shall be 
11defined as the revenue from the tax imposed by subsections (a) 
12and (b) of Section 201 of the Illinois Income Tax Act which is 
13deposited in the General Revenue Fund, the Education 
14Assistance Fund and the Income Tax Surcharge Local Government 
15Distributive Fund during the month minus the amount paid out 
16of the General Revenue Fund in State warrants during that same 
17month as refunds to taxpayers for overpayment of liability 
18under the tax imposed by subsections (a) and (b) of Section 201 
19of the Illinois Income Tax Act. Upon receipt of such 
20certification, the Treasurer shall transfer from the General 
21Revenue Fund to a special fund in the State treasury, to be 
22known as the "Local Government Distributive Fund", the amount 
23shown on such certification.
24    Beginning on the effective date of this amendatory Act of 
25the 98th General Assembly, the Comptroller shall perform the 
26transfers required by this Section no later than 60 days after 
 
 
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1he or she receives the certification from the Treasurer. 
2    This Section constitutes an irrevocable and continuing 
3appropriation of all All amounts that are paid into the Local 
4Government Distributive Fund in accordance with this Section 
5or from any other other source and that are allocated pursuant 
6to this Act are appropriated on a continuing basis. The State 
7Treasurer and State Comptroller are hereby authorized to make 
8distributions as provided in this Act.    
9(Source: P.A. 98-1052, eff. 8-26-14.)

10    (30 ILCS 115/2)    (from Ch. 85, par. 612)
11    Sec. 2. Allocation and Disbursement.     
12    (a) As soon as may be after the first day of each month, 
13the Department of Revenue shall allocate among the several 
14municipalities and counties of this State the amount available 
15in the Local Government Distributive Fund and in the Income 
16Tax Surcharge Local Government Distributive Fund, determined 
17as provided in Sections 1 and 1a above. Except as provided in 
18Sections 13 and 13.1 of this Act, the Department shall then 
19certify such allocations to the State Comptroller, who shall 
20pay over to the several municipalities and counties the 
21respective amounts allocated to them. The amount of such Funds 
22allocable to each such municipality and county shall be in 
23proportion to the number of individual residents of such 
24municipality or county to the total population of the State, 
25determined in each case on the basis of the latest census of 
 
 
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1the State, municipality or county conducted by the Federal 
2government and certified by the Secretary of State and for 
3annexations to municipalities, the latest Federal, State or 
4municipal census of the annexed area which has been certified 
5by the Department of Revenue. Allocations to the City of 
6Chicago under this Section are subject to Section 6 of the 
7Hotel Operators' Occupation Tax Act. For the purpose of this 
8Section, the number of individual residents of a county shall 
9be reduced by the number of individuals residing therein in 
10municipalities, but the number of individual residents of the 
11State, county and municipality shall reflect the latest census 
12of any of them. The amounts transferred into the Local 
13Government Distributive Fund pursuant to Section 9 of the Use 
14Tax Act, Section 9 of the Service Use Tax Act, Section 9 of the 
15Service Occupation Tax Act, and Section 3 of the Retailers' 
16Occupation Tax Act, each as now or hereafter amended, pursuant 
17to the amendments of such Sections by Public Act 85-1135, 
18shall be distributed as provided in said Sections.
19    (b) It is the intent of the General Assembly that 
20allocations made under this Section shall be made in a fair and 
21equitable manner. Accordingly, the clerk of any municipality 
22to which territory has been annexed, or from which territory 
23has been disconnected, shall notify the Department of Revenue 
24in writing of that annexation or disconnection and shall (1) 
25state the number of residents within the territory that was 
26annexed or disconnected, based on the last census conducted by 
 
 
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1the federal, State, or municipal government and certified by 
2the Illinois Secretary of State, and (2) furnish therewith a 
3certified copy of the plat of annexation or, in the case of 
4disconnection, the ordinance, final judgment, or resolution of 
5disconnection together with an accurate depiction of the 
6territory disconnected. The county in which the annexed or 
7disconnected territory is located shall verify that the number 
8of residents stated on the written notice that is to be sent to 
9the Department of Revenue is true and accurate. The verified 
10statement of the county shall accompany the written notice. 
11However, if the county does not respond to the municipality's 
12request for verification within 30 days, this verification 
13requirement shall be waived. The written notice shall be 
14provided to the Department of Revenue (1) within 30 days after 
15the effective date of this amendatory Act of the 96th General 
16Assembly for disconnections occurring after January 1, 2007 
17and before the effective date of this amendatory Act of the 
1896th General Assembly or (2) within 30 days after the 
19annexation or disconnection for annexations or disconnections 
20occurring on or after the effective date of this amendatory 
21Act of the 96th General Assembly. For purposes of this 
22Section, a disconnection or annexation through court order is 
23deemed to be effective 30 days after the entry of a final 
24judgment order, unless stayed pending appeal. Thereafter, the 
25monthly allocation made to the municipality and to any other 
26municipality or county affected by the annexation or 
 
 
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1disconnection shall be adjusted in accordance with this 
2Section to reflect the change in residency of the residents of 
3the territory that was annexed or disconnected. The adjustment 
4shall be made no later than 30 days after the Department of 
5Revenue's receipt of the written notice of annexation or 
6disconnection described in this Section. 
7(Source: P.A. 96-1040, eff. 7-14-10.)

8    Section 99. Effective date. This Act takes effect upon 
9becoming law.