HB3418ham001 100TH GENERAL ASSEMBLY

Rep. Sonya M. Harper

Filed: 4/25/2017

10000HB3418ham001 LRB100 10990 AWJ 25457 a

AMENDMENT TO HOUSE BILL 3418

AMENDMENT NO. ______. Amend House Bill 3418 by replacing everything after the enacting clause with the following:

"Section 5. The State Finance Act is amended by adding Section 5.878 to Article 5 as follows:

(30 ILCS 105/5.878 new)

Sec. 5.878. The Urban Agricultural Zone Fund.

Section 10. The Illinois Municipal Code is amended by adding Division 15.4 to Article 11 as follows:

(65 ILCS 5/Art. 11 Div. 15.4 heading new)

DIVISION 15.4. MUNICIPAL URBAN AGRICULTURAL ZONES

(65 ILCS 5/11-15.4-5 new)

Sec. 11-15.4-5. Definitions. As used in this Division:

"Agricultural product" means an agricultural, horticultural, viticultural, or vegetable product either in its natural or processed state, that has been produced, processed, or otherwise had value added to it in this State. "Agricultural product" includes, but is not limited to, growing of grapes that will be processed into wine; bees; honey; fish or other aquacultural product; planting seed; livestock or livestock product; forestry product; and poultry or poultry product.

"Aquaculture" and "aquatic products" have the meanings given to those terms in Section 4 of the Aquaculture Development Act.

"Blighted area" means that portion of a municipality within which the corporate authorities of the municipality determines that by reason of age, obsolescence, inadequate or outmoded design, or physical deterioration have become economic and social liabilities, and that these conditions are conducive to ill health, transmission of disease, crime, or inability to pay reasonable taxes. "Blighted area" does not include farmland assessed under Section 10-110 of the Property Tax Code.

"Department" means the Department of Agriculture.

"Domesticated animal" means cattle; calves; sheep; swine; ratite birds, including, but not limited to, ostrich and emu; llamas; alpaca; buffalo; elk documented as obtained from a legal source and not from the wild; goats; horses and other equines; or rabbits raised in confinement for human consumption.

"Grower UAZ" means a type of UAZ:

(1) that can either grow produce, raise livestock, or produce other value-added agricultural products; and

(2) that does not exceed 50 laying hens, 650 broiler chickens, or 30 domesticated animals.

"Livestock" means cattle; calves; sheep; swine; ratite birds including but not limited to ostrich and emu; aquatic products obtained through aquaculture; llamas; alpaca; buffalo; elk documented as obtained from a legal source and not from the wild; goats; horses and other equines; or rabbits raised in confinement for human consumption.

"Locally grown" means a product that was grown or raised in the same county or adjoining county in which the UAZ is located.

"Meat" means any edible portion of livestock or poultry carcass.

"Meat product" means anything containing meat intended for or capable of use for human consumption, which is derived, in whole or in part, from livestock or poultry.

"Poultry" means any domesticated bird intended for human consumption.

"Processing UAZ" means a type of UAZ:

(1) that processes livestock or poultry for human consumption;

(2) that meets federal and State processing laws and standards; or

(3) that is a qualifying small business approved by the Department.

"Public colleges and universities" has the meaning given to that term in Section 5 of the Higher Education Veterans Service Act.

"Qualifying small business" means those enterprises which are established within an Urban Agricultural Zone subsequent to its creation, and which meet the definition established for the federal Small Business Administration and set forth in Section 121.301 of Part 121 of Title 13 of the Code of Federal Regulations.

"Sales tax amounts" means the amount of taxes paid under the Retailers' Occupation Tax Act, the Use Tax Act, the 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 UAZ.

"Urban agricultural zone" or "UAZ" means a zone within a metropolitan statistical area, as defined by the United States Office of Budget and Management, which has one or more of the following entities that is a qualifying small business, and approved by the Department, as follows:

(1) any organization or person who grows produce or other agricultural products;

(2) any organization or person that raises livestock or poultry;

(3) any organization or person who processes livestock or poultry; or

(4) any organization that sells at a minimum 75% locally grown food.

"Value-added agricultural products" means any product or products that are the result of:

(1) using an agricultural product grown in this State to produce a meat or dairy product in this State;

(2) a change in the physical state or form of the original agricultural product;

(3) an agricultural product grown in this State which has had its value enhanced by special production methods such as organically grown products; or

(4) a physical segregation of a commodity or agricultural product grown in this State that enhances its value such as identity preserved marketing systems.

"Vending UAZ" means a type of UAZ:

(1) that sells produce, meat, or locally grown value-added agricultural products;

(2) that is able to accept food stamps under the provisions of the Supplemental Nutrition Assistance Program as a form of payment; and

(3) that is a qualifying small business that is approved by the Department for a UAZ vendor license.

(65 ILCS 5/11-15.4-10 new)

Sec. 11-15.4-10. Urban agricultural zone board.

(a) The corporate authorities of a municipality planning to seek designation of an urban agricultural zone shall establish an urban agricultural zone board. There shall be 7 members on the board. One member of the board shall be appointed by the school district or districts located within the area proposed for designation as an urban agricultural zone. Two members of the board shall be appointed by other affected taxing units of local government. The remaining 4 members shall be appointed by the president or mayor of the municipality. The 4 members chosen by the president or mayor shall all be residents of the municipality in which the UAZ is to be located, and at least one of the 4 members shall have experience in or represent an organization associated with sustainable agriculture, urban farming, community gardening, or any of the activities or products authorized by this Division for UAZs.

(b) The school district member and the 2 affected taxing unit of local government members shall each have initial terms of 5 years. Of the 4 members appointed by the president or mayor, 2 shall have initial terms of 4 years, and 2 shall have initial terms of 3 years. Thereafter, members shall serve terms of 5 years. Each member shall hold office until a successor has been appointed. All vacancies shall be filled in the same manner as the original appointment. For inefficiency, neglect of duty, or misconduct in office, a member of the board may be removed by the applicable appointing authority.

(c) The members of the board annually shall elect a chair from among the members.

(d) A majority of the members shall constitute a quorum of the board for the purpose of conducting business and exercising the powers of the board and for all other purposes. Action may be taken by the board upon a vote of a majority of the members present.

(e) The role of the board shall be to conduct the activities necessary to advise the corporate authorities of the municipality on the designation of an urban agricultural zone and any other advisory duties as determined by the corporate authorities of the municipality. The role of the board after the designation of an urban agricultural zone shall be review and assessment of zone activities.

(65 ILCS 5/11-15.4-15 new)

Sec. 11-15.4-15. Application for an urban agricultural zone; review; dissolution.

(a) A person or organization may submit to the municipal clerk an application to develop a UAZ in a blighted area. The application shall demonstrate or identify on the application:

(1) if the person or organization is a grower UAZ, processing UAZ, vending UAZ, or a combination of all three types of UAZs in which case the person or organization shall meet the requirements of each type of UAZ in order to qualify;

(2) the number of jobs to be created;

(3) the types of products to be produced;

(4) if applying for a vending UAZ, the ability to accept food stamps under the provisions of the Supplemental Nutrition Assistance Program if selling products to consumers;

(5) the geographic description of the area that will be included in the UAZ;

(6) all taxing units of local government impacted by the proposed UAZ; and

(7) the amount of property taxes to be abated, if any, under Section 11-15.4-25, including which taxing units of local government would be impacted by the abatement.

(b) A municipality shall review and modify the application as necessary before either approving or denying the request to establish a UAZ.

(c) Approval of the UAZ by a municipality shall be reviewed 5 and 10 years after the development of the UAZ. After 25 years, the UAZ shall dissolve. If the municipality finds during its review that the UAZ is not meeting the requirements set out in this Division, the municipality may dissolve the UAZ by ordinance or resolution.

(65 ILCS 5/11-15.4-20 new)

Sec. 11-15.4-20. Notice and public hearing; urban agricultural zone ordinance. Prior to the adoption of an ordinance designating an urban agricultural zone, the urban agricultural zone board shall fix a time and place for a public hearing and notify each taxing unit of local government located wholly or partially within the boundaries of the proposed urban agricultural zone. The board shall send, by certified mail, a notice of the hearing to all taxing units of local government and shall publish notice of such hearing in a newspaper of general circulation in the area to be affected by the designation at least 20 days prior to the hearing but not more than 30 days prior to the hearing. The notice shall state the time, location, date, and purpose of the hearing. At the public hearing, any interested person or affected taxing unit of local government may file with the board written objections or comments and may be heard orally in respect to, any issues embodied in the notice. The board shall hear and consider all objections, comments, and other evidence presented at the hearing. The hearing may be continued 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.

Following the conclusion of the public hearing required under this Section, the corporate authorities of the municipality may adopt an ordinance designating an urban agricultural zone.

(65 ILCS 5/11-15.4-25 new)

Sec. 11-15.4-25. Taxation of property; water rates and charges.

(a) If authorized by the urban agricultural zone ordinance under Section 11-15.4-20, real property located within a UAZ that is used for growing or raising of agricultural products is not subject to assessment or payment of ad valorem taxes on real property imposed by the State or units of local government specified in the ordinance for a period of tax abatement of up to 25 years as specified by ordinance under Section 11-15.4-20 except in an amount not greater than the amount of taxes assessed in the levy year immediately preceding the levy year during which the UAZ was designated. The amounts of the tax assessed used for growing or raising of agricultural products may not be increased during the period stated in the ordinance as long as the real property is used in furtherance of the activities provided under this Division. At the conclusion of the period of abatement provided by the ordinance, the property used for growing or raising of agricultural products shall then be reassessed. If only a portion of real property is used as a UAZ, then only that portion of real property shall be exempt from assessment or payment of ad valorem taxes on the property as provided by this Section. Parcels of property assessed under Section 10-110 of the Property Tax Code are not eligible for the abatement provided in this subsection (a).

(b) Any sales tax amounts received from the sale of agricultural products grown or produced and sold in the UAZ shall be deposited in the Urban Agricultural Zone Fund established in Section 11-15.4-30 of this Division. An amount equal to 1% shall be retained by the Director of the Department of Revenue for deposit in the General Revenue Fund to offset the costs of collection.

(c) Any entity providing water to the UAZ may authorize a water user who grows or raises agricultural products in the UAZ to (1) pay wholesale water rates, if available, or (2) pay 50% of the standard connection charge.

(65 ILCS 5/11-15.4-30 new)

Sec. 11-15.4-30. The Urban Agricultural Zone Fund.

(a) The Urban Agricultural Zone Fund, a special fund created in the State treasury, shall consist of moneys collected under Section 5-45025 of Article 5 of the Counties Code and Section 11-15.4-25 of this Division. Except as provided for in subsection (b), the Comptroller shall order transferred before the end of each quarter of the fiscal year, and the Treasurer shall transfer, an amount equal to the moneys collected from the municipal UAZs within the previous quarter.

(b) A school district or school districts that have a UAZ in their district territory may apply to the Department for money in the fund to be used for the development of curriculum on or the implementation of urban farming practices under the guidance of a public college or university. The funds are to be distributed on a competitive basis within the school district or districts in which the UAZ is located pursuant to rules published by the Department, with special consideration given to the relative number of students eligible for free and reduced-price lunches attending the schools within the district or districts. The Department may designate up to 10% of moneys from quarterly sales tax amounts in the Agricultural Zone Fund to school districts under this subsection (b). The Department shall notify the Comptroller of any moneys awarded to a school district under this subsection (b) no later than 14 days before the end of each quarter and the Comptroller shall reduce the amount ordered transferred to the municipality by that amount.

(65 ILCS 5/11-15.4-35 new)

Sec. 11-15.4-35. Severability. The provisions of this Division are severable under Section 1.31 of the Statute on Statutes.

Section 99. Effective date. This Act takes effect July 1, 2017.".