Bill Text: IL HB3894 | 2021-2022 | 102nd 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 1-0)

Status: (Introduced - Dead) 2021-03-27 - Rule 19(a) / Re-referred to Rules Committee [HB3894 Detail]

Download: Illinois-2021-HB3894-Introduced.html

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102ND GENERAL ASSEMBLY State of Illinois 2021 and 2022 HB3894 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.
LRB102 12837 AWJ 18179 b
FISCAL NOTE ACT MAY APPLY HOUSING AFFORDABILITY IMPACT NOTE ACT MAY APPLY
A BILL FOR
HB3894 LRB102 12837 AWJ 18179 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

HB3894 - 2 - LRB102 12837 AWJ 18179 b
potential 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

HB3894 - 3 - LRB102 12837 AWJ 18179 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

HB3894 - 4 - LRB102 12837 AWJ 18179 b
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.

HB3894 - 5 - LRB102 12837 AWJ 18179 b
(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

HB3894 - 6 - LRB102 12837 AWJ 18179 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.

HB3894 - 7 - LRB102 12837 AWJ 18179 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

HB3894 - 8 - LRB102 12837 AWJ 18179 b
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.
(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

HB3894 - 9 - LRB102 12837 AWJ 18179 b
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 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

HB3894 - 10 - LRB102 12837 AWJ 18179 b
land sufficient in number to retard or impede the
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

HB3894 - 11 - LRB102 12837 AWJ 18179 b
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 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

HB3894 - 12 - LRB102 12837 AWJ 18179 b
contribute to the alleviation of all or part of the
flooding.
(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.

HB3894 - 13 - LRB102 12837 AWJ 18179 b
On and after November 1, 1999, "conservation area" means
any improved area within the boundaries of a redevelopment
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,

HB3894 - 14 - LRB102 12837 AWJ 18179 b
depressions, loose paving material, and weeds protruding
through paved surfaces.
(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

HB3894 - 15 - LRB102 12837 AWJ 18179 b
structural inadequacies preventing ingress and egress to
and from all rooms and units within a building.
(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

HB3894 - 16 - LRB102 12837 AWJ 18179 b
adequate or proper access to a public right-of-way, lack
of reasonably required off-street parking, or inadequate
provision for loading and service.
(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,

HB3894 - 17 - LRB102 12837 AWJ 18179 b
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.
(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

HB3894 - 18 - LRB102 12837 AWJ 18179 b
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 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

HB3894 - 19 - LRB102 12837 AWJ 18179 b
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,
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'

HB3894 - 20 - LRB102 12837 AWJ 18179 b
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
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

HB3894 - 21 - LRB102 12837 AWJ 18179 b
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
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

HB3894 - 22 - LRB102 12837 AWJ 18179 b
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 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

HB3894 - 23 - LRB102 12837 AWJ 18179 b
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.
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

HB3894 - 24 - LRB102 12837 AWJ 18179 b
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.
(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

HB3894 - 25 - LRB102 12837 AWJ 18179 b
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 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

HB3894 - 26 - LRB102 12837 AWJ 18179 b
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
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

HB3894 - 27 - LRB102 12837 AWJ 18179 b
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) 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

HB3894 - 28 - LRB102 12837 AWJ 18179 b
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 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

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(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
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.

HB3894 - 30 - LRB102 12837 AWJ 18179 b
(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
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,

HB3894 - 31 - LRB102 12837 AWJ 18179 b
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
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)

HB3894 - 32 - LRB102 12837 AWJ 18179 b
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.
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

HB3894 - 33 - LRB102 12837 AWJ 18179 b
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
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

HB3894 - 34 - LRB102 12837 AWJ 18179 b
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
(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,

HB3894 - 35 - LRB102 12837 AWJ 18179 b
"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
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

HB3894 - 36 - LRB102 12837 AWJ 18179 b
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,
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

HB3894 - 37 - LRB102 12837 AWJ 18179 b
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
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

HB3894 - 38 - LRB102 12837 AWJ 18179 b
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
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

HB3894 - 39 - LRB102 12837 AWJ 18179 b
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, 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

HB3894 - 40 - LRB102 12837 AWJ 18179 b
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
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

HB3894 - 41 - LRB102 12837 AWJ 18179 b
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 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

HB3894 - 42 - LRB102 12837 AWJ 18179 b
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
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

HB3894 - 43 - LRB102 12837 AWJ 18179 b
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
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;

HB3894 - 44 - LRB102 12837 AWJ 18179 b
(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
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

HB3894 - 45 - LRB102 12837 AWJ 18179 b
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
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

HB3894 - 46 - LRB102 12837 AWJ 18179 b
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 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

HB3894 - 47 - LRB102 12837 AWJ 18179 b
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
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

HB3894 - 48 - LRB102 12837 AWJ 18179 b
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 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

HB3894 - 49 - LRB102 12837 AWJ 18179 b
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
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

HB3894 - 50 - LRB102 12837 AWJ 18179 b
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 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

HB3894 - 51 - LRB102 12837 AWJ 18179 b
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 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

HB3894 - 52 - LRB102 12837 AWJ 18179 b
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,
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

HB3894 - 53 - LRB102 12837 AWJ 18179 b
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
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"

HB3894 - 54 - LRB102 12837 AWJ 18179 b
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
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

HB3894 - 55 - LRB102 12837 AWJ 18179 b
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 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

HB3894 - 56 - LRB102 12837 AWJ 18179 b
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%. 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

HB3894 - 57 - LRB102 12837 AWJ 18179 b
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 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.

HB3894 - 58 - LRB102 12837 AWJ 18179 b
(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
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

HB3894 - 59 - LRB102 12837 AWJ 18179 b
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
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)

HB3894 - 60 - LRB102 12837 AWJ 18179 b
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
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

HB3894 - 61 - LRB102 12837 AWJ 18179 b
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
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

HB3894 - 62 - LRB102 12837 AWJ 18179 b
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 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

HB3894 - 63 - LRB102 12837 AWJ 18179 b
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
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

HB3894 - 64 - LRB102 12837 AWJ 18179 b
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,
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

HB3894 - 65 - LRB102 12837 AWJ 18179 b
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 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

HB3894 - 66 - LRB102 12837 AWJ 18179 b
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 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

HB3894 - 67 - LRB102 12837 AWJ 18179 b
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
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.

HB3894 - 68 - LRB102 12837 AWJ 18179 b
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 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

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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
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

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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 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

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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 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

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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;
(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

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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
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

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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
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

HB3894 - 75 - LRB102 12837 AWJ 18179 b
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
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

HB3894 - 76 - LRB102 12837 AWJ 18179 b
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 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

HB3894 - 77 - LRB102 12837 AWJ 18179 b
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.
(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

HB3894 - 78 - LRB102 12837 AWJ 18179 b
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
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

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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 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

HB3894 - 80 - LRB102 12837 AWJ 18179 b
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 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

HB3894 - 81 - LRB102 12837 AWJ 18179 b
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
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

HB3894 - 82 - LRB102 12837 AWJ 18179 b
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
(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

HB3894 - 83 - LRB102 12837 AWJ 18179 b
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 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

HB3894 - 84 - LRB102 12837 AWJ 18179 b
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
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

HB3894 - 85 - LRB102 12837 AWJ 18179 b
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
municipality may not adopt tax increment financing in a
redevelopment project area after July 30, 1997 (the effective
date of Public Act 90-258) 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

HB3894 - 86 - LRB102 12837 AWJ 18179 b
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, 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

HB3894 - 87 - LRB102 12837 AWJ 18179 b
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 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

HB3894 - 88 - LRB102 12837 AWJ 18179 b
an amount determined by multiplying the rate at which
taxes were last extended against the taxable lot, block,
tract 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 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

HB3894 - 89 - LRB102 12837 AWJ 18179 b
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 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) this
amendatory Act of 1988 a municipality's own ad valorem tax
arising from levies on taxable real property be included

HB3894 - 90 - LRB102 12837 AWJ 18179 b
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 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

HB3894 - 91 - LRB102 12837 AWJ 18179 b
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
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

HB3894 - 92 - LRB102 12837 AWJ 18179 b
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
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

HB3894 - 93 - LRB102 12837 AWJ 18179 b
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 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

HB3894 - 94 - LRB102 12837 AWJ 18179 b
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
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

HB3894 - 95 - LRB102 12837 AWJ 18179 b
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 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 this amendatory

HB3894 - 96 - LRB102 12837 AWJ 18179 b
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
equalized assessed value of each such taxable lot,
block, tract, or parcel of real property existing at

HB3894 - 97 - LRB102 12837 AWJ 18179 b
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
financing, shall be paid to such school district
in the manner required by law in the absence of the

HB3894 - 98 - LRB102 12837 AWJ 18179 b
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;
revised 8-8-19.)
(65 ILCS 5/11-74.4-8a) (from Ch. 24, par. 11-74.4-8a)
Sec. 11-74.4-8a. (1) Until June 1, 1988, a municipality

HB3894 - 99 - LRB102 12837 AWJ 18179 b
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 this Section for a redevelopment project

HB3894 - 100 - LRB102 12837 AWJ 18179 b
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
located within a redevelopment project area also has one or

HB3894 - 101 - LRB102 12837 AWJ 18179 b
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 for purposes of State payments to the

HB3894 - 102 - LRB102 12837 AWJ 18179 b
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
Retailers' Occupation Tax Act and the Municipal Service

HB3894 - 103 - LRB102 12837 AWJ 18179 b
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 municipalities, as most recently calculated by the

HB3894 - 104 - LRB102 12837 AWJ 18179 b
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

HB3894 - 105 - LRB102 12837 AWJ 18179 b
allocation fund. If, however, a municipality has extended the
estimated 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,

HB3894 - 106 - LRB102 12837 AWJ 18179 b
may by ordinance authorize the Department of Revenue to
annually certify and pay 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 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

HB3894 - 107 - LRB102 12837 AWJ 18179 b
the result of an industrial or commercial facility initiating
operations in the redevelopment project area with a resulting
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

HB3894 - 108 - LRB102 12837 AWJ 18179 b
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.
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

HB3894 - 109 - LRB102 12837 AWJ 18179 b
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 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

HB3894 - 110 - LRB102 12837 AWJ 18179 b
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 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.

HB3894 - 111 - LRB102 12837 AWJ 18179 b
(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
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

HB3894 - 112 - LRB102 12837 AWJ 18179 b
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
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

HB3894 - 113 - LRB102 12837 AWJ 18179 b
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
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

HB3894 - 114 - LRB102 12837 AWJ 18179 b
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
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

HB3894 - 115 - LRB102 12837 AWJ 18179 b
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
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,

HB3894 - 116 - LRB102 12837 AWJ 18179 b
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.
(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

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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
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

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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 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

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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.
(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

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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
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

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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
(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

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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 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

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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
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

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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
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.)