Bill Text: IL HB4806 | 2019-2020 | 101st General Assembly | Introduced

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

Spectrum: Bipartisan Bill

Status: (Introduced - Dead) 2020-06-23 - Rule 19(b) / Re-referred to Rules Committee [HB4806 Detail]

Download: Illinois-2019-HB4806-Introduced.html

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101ST GENERAL ASSEMBLY State of Illinois 2019 and 2020 HB4806 Introduced , by Rep. Blaine Wilhour SYNOPSIS AS INTRODUCED:
65 ILCS 5/11-74.4-7 from Ch. 24, par. 11-74.4-7
65 ILCS 5/11-74.4-8 from Ch. 24, par. 11-74.4-8
Amends the Tax Increment Allocation Redevelopment Act in the Illinois Municipal Code. Provides that moneys in the special tax allocation fund may be used to make distributions to certain taxing districts. Provides that moneys received from the additional distributions shall be used by the affected taxing district to pay debt service on obligations incurred by the taxing district and to provide property tax relief. Effective immediately.
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FISCAL NOTE ACT MAY APPLY HOUSING AFFORDABILITY IMPACT NOTE ACT MAY APPLY
A BILL FOR
HB4806 LRB101 18328 HLH 67774 b
AN ACT concerning local government.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Illinois Municipal Code is amended by
changing Sections 11-74.4-7 and 11-74.4-8 as follows:
(65 ILCS 5/11-74.4-7) (from Ch. 24, par. 11-74.4-7)
Sec. 11-74.4-7. Special tax allocation fund; obligations.
(a) Obligations secured by the special tax allocation fund
set forth in Section 11-74.4-8 for the redevelopment project
area may be issued to provide for redevelopment project costs.
Such obligations, when so issued, shall be retired in the
manner provided in the ordinance authorizing the issuance of
such obligations by the receipts of taxes levied as specified
in Section 11-74.4-9 against the taxable property included in
the area, by revenues as specified by Section 11-74.4-8a and
other revenue designated by the municipality. A municipality
may in the ordinance pledge all or any part of the funds in and
to be deposited in the special tax allocation fund created
pursuant to Section 11-74.4-8 to the payment of the
redevelopment project costs and obligations. Any pledge of
funds in the special tax allocation fund shall provide for
distribution to the taxing districts and to the Illinois
Department of Revenue of moneys not required, pledged,

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earmarked, distributed as provided in subsection (b), or
otherwise designated for payment and securing of the
obligations and anticipated redevelopment project costs and
such excess funds shall be calculated annually and deemed to be
"surplus" funds. In the event a municipality only applies or
pledges a portion of the funds in the special tax allocation
fund for the payment or securing of anticipated redevelopment
project costs or of obligations, any such funds remaining in
the special tax allocation fund after complying with the
requirements of the application or pledge, shall also be
calculated annually and deemed "surplus" funds. All surplus
funds in the special tax allocation fund shall be distributed
annually within 180 days after the close of the municipality's
fiscal year by being paid by the municipal treasurer to the
County Collector, to the Department of Revenue and to the
municipality in direct proportion to the tax incremental
revenue received as a result of an increase in the equalized
assessed value of property in the redevelopment project area,
tax incremental revenue received from the State and tax
incremental revenue received from the municipality, but not to
exceed as to each such source the total incremental revenue
received from that source. The County Collector shall
thereafter make distribution to the respective taxing
districts in the same manner and proportion as the most recent
distribution by the county collector to the affected districts
of real property taxes from real property in the redevelopment

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project area.
Without limiting the foregoing in this Section, the
municipality may in addition to obligations secured by the
special tax allocation fund pledge for a period not greater
than the term of the obligations towards payment of such
obligations any part or any combination of the following: (a)
net revenues of all or part of any redevelopment project; (b)
taxes levied and collected on any or all property in the
municipality; (c) the full faith and credit of the
municipality; (d) a mortgage on part or all of the
redevelopment project; (d-5) repayment of bonds issued
pursuant to subsection (p-130) of Section 19-1 of the School
Code; or (e) any other taxes or anticipated receipts that the
municipality may lawfully pledge.
Such obligations may be issued in one or more series
bearing interest at such rate or rates as the corporate
authorities of the municipality shall determine by ordinance.
Such obligations shall bear such date or dates, mature at such
time or times not exceeding 20 years from their respective
dates, be in such denomination, carry such registration
privileges, be executed in such manner, be payable in such
medium of payment at such place or places, contain such
covenants, terms and conditions, and be subject to redemption
as such ordinance shall provide. Obligations issued pursuant to
this Act may be sold at public or private sale at such price as
shall be determined by the corporate authorities of the

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municipalities. No referendum approval of the electors shall be
required as a condition to the issuance of obligations pursuant
to this Division except as provided in this Section.
In the event the municipality authorizes issuance of
obligations pursuant to the authority of this Division secured
by the full faith and credit of the municipality, which
obligations are other than obligations which may be issued
under home rule powers provided by Article VII, Section 6 of
the Illinois Constitution, or pledges taxes pursuant to (b) or
(c) of the second paragraph of this section, the ordinance
authorizing the issuance of such obligations or pledging such
taxes shall be published within 10 days after such ordinance
has been passed in one or more newspapers, with general
circulation within such municipality. The publication of the
ordinance shall be accompanied by a notice of (1) the specific
number of voters required to sign a petition requesting the
question of the issuance of such obligations or pledging taxes
to be submitted to the electors; (2) the time in which such
petition must be filed; and (3) the date of the prospective
referendum. The municipal clerk shall provide a petition form
to any individual requesting one.
If no petition is filed with the municipal clerk, as
hereinafter provided in this Section, within 30 days after the
publication of the ordinance, the ordinance shall be in effect.
But, if within that 30 day period a petition is filed with the
municipal clerk, signed by electors in the municipality

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numbering 10% or more of the number of registered voters in the
municipality, asking that the question of issuing obligations
using full faith and credit of the municipality as security for
the cost of paying for redevelopment project costs, or of
pledging taxes for the payment of such obligations, or both, be
submitted to the electors of the municipality, the corporate
authorities of the municipality shall call a special election
in the manner provided by law to vote upon that question, or,
if a general, State or municipal election is to be held within
a period of not less than 30 or more than 90 days from the date
such petition is filed, shall submit the question at the next
general, State or municipal election. If it appears upon the
canvass of the election by the corporate authorities that a
majority of electors voting upon the question voted in favor
thereof, the ordinance shall be in effect, but if a majority of
the electors voting upon the question are not in favor thereof,
the ordinance shall not take effect.
The ordinance authorizing the obligations may provide that
the obligations shall contain a recital that they are issued
pursuant to this Division, which recital shall be conclusive
evidence of their validity and of the regularity of their
issuance.
In the event the municipality authorizes issuance of
obligations pursuant to this Section secured by the full faith
and credit of the municipality, the ordinance authorizing the
obligations may provide for the levy and collection of a direct

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annual tax upon all taxable property within the municipality
sufficient to pay the principal thereof and interest thereon as
it matures, which levy may be in addition to and exclusive of
the maximum of all other taxes authorized to be levied by the
municipality, which levy, however, shall be abated to the
extent that monies from other sources are available for payment
of the obligations and the municipality certifies the amount of
said monies available to the county clerk.
A certified copy of such ordinance shall be filed with the
county clerk of each county in which any portion of the
municipality is situated, and shall constitute the authority
for the extension and collection of the taxes to be deposited
in the special tax allocation fund.
A municipality may also issue its obligations to refund in
whole or in part, obligations theretofore issued by such
municipality under the authority of this Act, whether at or
prior to maturity, provided however, that the last maturity of
the refunding obligations may not be later than the dates set
forth under Section 11-74.4-3.5.
In the event a municipality issues obligations under home
rule powers or other legislative authority the proceeds of
which are pledged to pay for redevelopment project costs, the
municipality may, if it has followed the procedures in
conformance with this division, retire said obligations from
funds in the special tax allocation fund in amounts and in such
manner as if such obligations had been issued pursuant to the

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provisions of this division.
All obligations heretofore or hereafter issued pursuant to
this Act shall not be regarded as indebtedness of the
municipality issuing such obligations or any other taxing
district for the purpose of any limitation imposed by law.
(b) Prior to the distribution of any surplus funds under
subsection (a), a municipality may make additional
distributions from the special tax allocation fund to any
affected taxing district, provided that the total amount of
such additional distributions may not cause the balance in the
special tax allocation fund to be less than the amount pledged
to pay obligations secured by the special tax allocation fund.
If an additional distribution is made under this subsection
(b), the moneys must be used by the affected taxing district to
pay debt service on obligations incurred by the taxing district
and to provide property tax relief as provided in this
subsection. Prior to receiving additional distributions under
this Section, the affected taxing district may enter into an
intergovernmental agreement with the municipality and must
agree to reduce the amount of its property tax levy for the
levy year in which the distributions are received by an amount
that is not less than the total amount of additional
distributions received during the taxable year.
As used in this subsection (b), "affected taxing district"
means a community college district, school district, park
district, library district, township, fire protection

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district, or county that has the authority to directly levy
taxes on the property within the redevelopment project area.
(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
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

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any redevelopment project area located within a transit
facility improvement area established pursuant to Section
11-74.4-3.3 in a municipality with a population of 1,000,000 or
more, ad valorem taxes, if any, arising from the levies upon
taxable real property in such redevelopment project area shall
be allocated as specifically provided in this Section:
(a) That portion of taxes levied upon each taxable lot,
block, tract, or parcel of real property which is
attributable to the lower of the current equalized assessed
value or the initial equalized assessed value of each such
taxable lot, block, tract, or parcel of real property in
the redevelopment project area shall be allocated to and
when collected shall be paid by the county collector to the
respective affected taxing districts in the manner
required by law in the absence of the adoption of tax
increment allocation financing.
(b) Except from a tax levied by a township to retire
bonds issued to satisfy court-ordered damages, that
portion, if any, of such taxes which is attributable to the
increase in the current equalized assessed valuation of
each taxable lot, block, tract, or parcel of real property
in the redevelopment project area over and above the
initial equalized assessed value of each property in 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

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fund of the municipality for the purpose of paying
redevelopment project costs and obligations incurred in
the payment thereof. In any county with a population of
3,000,000 or more that has adopted a procedure for
collecting taxes that provides for one or more of the
installments of the taxes to be billed and collected on an
estimated basis, the municipal treasurer shall be paid for
deposit in the special tax allocation fund of the
municipality, from the taxes collected from estimated
bills issued for property in the redevelopment project
area, the difference between the amount actually collected
from each taxable lot, block, tract, or parcel of real
property within the redevelopment project area and an
amount determined by multiplying the rate at which taxes
were last extended against the taxable lot, block, tract
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

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value.
(2) Not more than 50% of the total equalized
assessed value of the redevelopment project area as
last determined is attributable to a piece of property
assigned a single real estate index number.
(3) The municipal clerk has certified to the county
clerk that the municipality has issued its obligations
to which there has been pledged the incremental
property taxes of the redevelopment project area or
taxes levied and collected on any or all property in
the municipality or the full faith and credit of the
municipality to pay or secure payment for all or a
portion of the redevelopment project costs. The
certification shall be filed annually no later than
September 1 for the estimated taxes to be distributed
in the following year; however, for the year 1992 the
certification shall be made at any time on or before
March 31, 1992.
(4) The municipality has not requested that the
total initial equalized assessed value of real
property be adjusted as provided in subsection (b) of
Section 11-74.4-9.
The conditions of paragraphs (1) through (4) do not
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

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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 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

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25,000 and 50,000, (c) the municipality is wholly located
within a county with a 1990 population of over 750,000 and
(d) the redevelopment project area was established by the
municipality prior to June 1, 1990. This payment shall be
in lieu of a contribution of ad valorem taxes on real
property. If no such payment is made, any redevelopment
project area of the municipality shall be dissolved.
If a municipality has adopted tax increment allocation
financing by ordinance and the County Clerk thereafter
certifies the "total initial equalized assessed value as
adjusted" of the taxable real property within such
redevelopment project area in the manner provided in
paragraph (b) of Section 11-74.4-9, each year after the
date of the certification of the total initial equalized
assessed value as adjusted until redevelopment project
costs and all municipal obligations financing
redevelopment project costs have been paid the ad valorem
taxes, if any, arising from the levies upon the taxable
real property in such redevelopment project area by taxing
districts and tax rates determined in the manner provided
in paragraph (c) of Section 11-74.4-9 shall be divided as
follows, provided, however, that with respect to any
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

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the levies upon the taxable real property in such
redevelopment project area shall be allocated as
specifically provided in this Section:
(1) That portion of the taxes levied upon each
taxable lot, block, tract, or parcel of real property
which is attributable to the lower of the current
equalized assessed value or "current equalized
assessed value as adjusted" or the initial equalized
assessed value of each such taxable lot, block, tract,
or parcel of real property existing at the time tax
increment financing was adopted, minus the total
current homestead exemptions under Article 15 of the
Property Tax Code in the redevelopment project area
shall be allocated to and when collected shall be paid
by the county collector to the respective affected
taxing districts in the manner required by law in the
absence of the adoption of tax increment allocation
financing.
(2) That portion, if any, of such taxes which is
attributable to the increase in the current equalized
assessed valuation of each taxable lot, block, tract,
or parcel of real property in the redevelopment 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

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of property provided by Article 15 of the Property Tax
Code in the redevelopment project area, shall be
allocated to and when collected shall be paid to the
municipal Treasurer, who shall deposit said taxes into
a special fund called the special tax allocation fund
of the municipality for the purpose of paying
redevelopment project costs and obligations incurred
in the payment thereof.
The municipality may pledge in the ordinance the funds
in and to be deposited in the special tax allocation fund
for the payment of such costs and obligations. No part of
the current equalized assessed valuation of each property
in the redevelopment project area attributable to any
increase above the total initial equalized assessed value,
or the total initial equalized assessed value as adjusted,
of such properties shall be used in calculating the general
State aid formula, provided for in Section 18-8 of the
School Code, or the evidence-based funding formula,
provided for in Section 18-8.15 of the School Code, until
such time as all redevelopment project costs have been paid
as provided for in this Section.
Whenever a municipality issues bonds for the purpose 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

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maintained by such trustee as the municipality shall deem
necessary to provide for the security and payment of the
bonds. If such municipality provides for the appointment of
a trustee, such trustee shall be considered the assignee of
any payments assigned by the municipality pursuant to such
ordinance and this Section. Any amounts paid to such
trustee as assignee shall be deposited in the funds or
accounts established pursuant to such trust agreement, and
shall be held by such trustee in trust for the benefit of
the holders of the bonds, and such holders shall have a
lien on and a security interest in such funds or accounts
so long as the bonds remain outstanding and unpaid. Upon
retirement of the bonds, the trustee shall pay over any
excess amounts held to the municipality for deposit in the
special tax allocation fund.
When such redevelopment projects costs, including,
without limitation, all municipal obligations financing
redevelopment project costs incurred under this Division,
have been paid, and all distributions under subsection (b)
of Section 11-74.4-7 have been made, all surplus funds then
remaining in the special tax allocation fund shall be
distributed by being paid by the municipal treasurer to 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

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not to exceed the total incremental revenue received from
the State or the municipality less any annual surplus
distribution of incremental revenue previously made; with
any remaining funds to be paid to the County Collector who
shall immediately thereafter pay said funds to the taxing
districts in the redevelopment project area in the same
manner and proportion as the most recent distribution by
the county collector to the affected districts of real
property taxes from real property in the redevelopment
project area.
Upon the payment of all redevelopment project costs,
the retirement of obligations, the distribution of any
excess monies pursuant to this Section, and final closing
of the books and records of the redevelopment project area,
the municipality shall adopt an ordinance dissolving the
special tax allocation fund for the redevelopment project
area and terminating the designation of the redevelopment
project area as a redevelopment project area. Title to real
or personal property and public improvements acquired by or
for the municipality as a result of the redevelopment
project and plan shall vest in the municipality when
acquired and shall continue to be held by the municipality
after the redevelopment project area has been terminated.
Municipalities shall notify affected taxing districts
prior to November 1 if the redevelopment project area is to
be terminated by December 31 of that same year. If a

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municipality extends estimated dates of completion of a
redevelopment project and retirement of obligations to
finance a redevelopment project, as allowed by Public Act
87-1272 this amendatory Act of 1993, that extension shall
not extend the property tax increment allocation financing
authorized by this Section. Thereafter the rates of the
taxing districts shall be extended and taxes levied,
collected and distributed in the manner applicable in the
absence of the adoption of tax increment allocation
financing.
If a municipality with a population of 1,000,000 or
more has adopted by ordinance tax increment allocation
financing for a redevelopment project area located in a
transit facility improvement area established pursuant to
Section 11-74.4-3.3, for each year after the effective date
of the ordinance until redevelopment project costs and all
municipal obligations financing redevelopment project
costs have been paid, the ad valorem taxes, if any, arising
from the levies upon the taxable real property in that
redevelopment project area by taxing districts and tax
rates determined in the manner provided in paragraph (c) of
Section 11-74.4-9 shall be divided as follows:
(1) That portion of the taxes levied upon each
taxable lot, block, tract, or parcel of real property
which is attributable to the lower of (i) the current
equalized assessed value or "current equalized

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

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of the adoption of tax increment allocation
financing, shall be paid to such school district in
the manner required by law in the absence of the
adoption of tax increment allocation financing;
then
(B) 80% of the remaining portion shall be paid
to the municipal Treasurer, who shall deposit said
taxes into a special fund called the special tax
allocation fund of the municipality for the
purpose of paying redevelopment project costs and
obligations incurred in the payment thereof; and
then
(C) 20% of the remaining portion shall be paid
to the respective affected taxing districts, other
than the school district described in clause (a)
above, in the manner required by law in the absence
of the adoption of tax increment allocation
financing.
Nothing in this Section shall be construed as relieving
property in such redevelopment project areas from being
assessed as provided in the Property Tax Code or as relieving
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.)

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