HB4168 101ST GENERAL ASSEMBLY

LRB101 15644 AWJ 65284 b

101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
HB4168

Introduced 1/22/2020, by Rep. William Davis

SYNOPSIS AS INTRODUCED:

See Index

Amends the State Revenue Sharing Act and the Illinois Income Tax Act. Provides that a monthly transfer shall be made to the Local Government Distributive Fund an amount certified by the Department of Revenue equal to: (1) the amount that would have been distributed under the State Revenue Sharing Act to all financially distressed cities if a sum calculated using 10% of the net revenue realized from the tax imposed by the Illinois Income Tax Act upon individuals, trusts, estates, and corporations during the preceding month had been transferred to the Local Government Distributive Fund; and (2) subtracting the amount distributed to all financially distressed cities from the Local Government Distributive Fund under the State Revenue Sharing Act. Provides for continuing appropriation if insufficient appropriations are made. Amends the Financially Distressed City Law of the Illinois Municipal Code. Makes the law applicable to both home rule and non-home rule municipalities. Provides that a State agency or unit of local government may also render technical assistance to a municipality's Financial Advisory Authority as the Authority may request. Provides that the State shall not reduce revenues or impose additional costs affecting a financially distressed city affecting the municipality unless it is consistent with the Financial Plan and Budget in effect. Provides that State mandates enacted while a municipality is designated as a financially distressed city that would cause the municipality to incur costs are not valid or enforceable during the period when the municipality is under the financially distressed city designation. Effective January 1, 2021.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning local government.

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

Section 5. The State Revenue Sharing Act is amended by changing Section 2 as follows:

(30 ILCS 115/2) (from Ch. 85, par. 612)

Sec. 2. Allocation and Disbursement.

(a) As soon as may be after the first day of each month, the Department of Revenue shall allocate among the several municipalities and counties of this State the amount available in the Local Government Distributive Fund and in the Income Tax Surcharge Local Government Distributive Fund, determined as provided in Sections 1 and 1a above. Except as provided in Sections 13 and 13.1 of this Act, the Department shall then certify such allocations to the State Comptroller, who shall pay over to the several municipalities and counties the respective amounts allocated to them. The amount of such Funds allocable to each such municipality and county shall be in proportion to the number of individual residents of such municipality or county to the total population of the State, determined in each case on the basis of the latest census of the State, municipality or county conducted by the Federal government and certified by the Secretary of State and for annexations to municipalities, the latest Federal, State or municipal census of the annexed area which has been certified by the Department of Revenue. Allocations to the City of Chicago under this Section are subject to Section 6 of the Hotel Operators' Occupation Tax Act. For the purpose of this Section, the number of individual residents of a county shall be reduced by the number of individuals residing therein in municipalities, but the number of individual residents of the State, county and municipality shall reflect the latest census of any of them. The amounts transferred into the Local Government Distributive Fund pursuant to Section 9 of the Use Tax Act, Section 9 of the Service Use Tax Act, Section 9 of the Service Occupation Tax Act, and Section 3 of the Retailers' Occupation Tax Act, each as now or hereafter amended, pursuant to the amendments of such Sections by Public Act 85-1135, shall be distributed as provided in said Sections.

(a-5) The Department of Revenue shall allocate, as soon as may be practicable after the first day of each month, among each financially distressed city, as that term is defined in Section 8-12-3 of the Illinois Municipal Code, funds transferred to the Local Government Distributive Fund under subsection (b-5) of Section 901 of the Illinois Income Tax Act. The Department shall then certify such allocations to the State Comptroller who shall pay over to each financially distressed city the respective amounts allocated to it. The amount of funds allocable to each financially distressed city shall be in proportion to the number of individual residents of the financially distressed city to the total population of all financially distressed cities combined, determined in each case on the basis of the latest census of the State, municipality, or county conducted by the Federal government and certified by the Secretary of State and for annexations to municipalities, the latest Federal, State, or municipal census of the annexed area which has been certified to the Department of Revenue. However, nothing in this subsection shall reduce an amount certified to the Comptroller under subsection (c) of Section 3-125 or subsection (b-5) of Section 4-118 of the Illinois Pension Code for failure to transmit contributions required by the financially distressed city to the Article 3 or Article 4 pension fund in its jurisdiction. The Comptroller shall continue to deduct and remit the certified amount to the Article 3 or Article 4 pension fund consistent with the requirements of subsection (c) of Section 3-125 or subsection (b-5) of Section 4-118 of the Illinois Pension Code. The Comptroller shall continue to deduct and remit all funds necessary to enforce the terms of existing settlement agreements between a municipality designated a financially distressed city and an Article 3 or Article 4 Pension Fund.

If for any reason the aggregate appropriations made available are insufficient to meet the amount certified under this subsection:

(1) The Governor shall submit to the General Assembly a proposed budget for the amount certified under this subsection from the Local Government Distributive Fund to each financially distressed city for each fiscal year so that the total Local Government Distributive Fund proposed budget is no less than the amount certified and allocated under this subsection. In addition, the Governor shall specify the total amount of funds to be transferred from the Local Government Distributive Fund to each financially distressed city during the budget year, which shall be no less than the amount certified and allocated under this subsection. The Governor may submit a proposed budget in which the total appropriated and transferred amounts are less than the amount certified and allocated under this subsection if the Governor declares in writing to the General Assembly the reason for the lesser amounts.

(2) The General Assembly shall appropriate the amount certified under this subsection from the Local Government Distributive Fund to each financially distressed city for each fiscal year so that the total Local Government Distributive Fund appropriation is no less than the amount certified under this subsection. In addition, the General Assembly shall legislatively transfer from the Local Government Distributive Fund to each financially distressed city for the fiscal year a total amount that is no less than the amount certified and allocated under this subsection. The General Assembly may appropriate or transfer lesser amounts if it declares by Joint Resolution the reason for the lesser amounts.

(b) It is the intent of the General Assembly that allocations made under this Section shall be made in a fair and equitable manner. Accordingly, the clerk of any municipality to which territory has been annexed, or from which territory has been disconnected, shall notify the Department of Revenue in writing of that annexation or disconnection and shall (1) state the number of residents within the territory that was annexed or disconnected, based on the last census conducted by the federal, State, or municipal government and certified by the Illinois Secretary of State, and (2) furnish therewith a certified copy of the plat of annexation or, in the case of disconnection, the ordinance, final judgment, or resolution of disconnection together with an accurate depiction of the territory disconnected. The county in which the annexed or disconnected territory is located shall verify that the number of residents stated on the written notice that is to be sent to the Department of Revenue is true and accurate. The verified statement of the county shall accompany the written notice. However, if the county does not respond to the municipality's request for verification within 30 days, this verification requirement shall be waived. The written notice shall be provided to the Department of Revenue (1) within 30 days after the effective date of this amendatory Act of the 96th General Assembly for disconnections occurring after January 1, 2007 and before the effective date of this amendatory Act of the 96th General Assembly or (2) within 30 days after the annexation or disconnection for annexations or disconnections occurring on or after the effective date of this amendatory Act of the 96th General Assembly. For purposes of this Section, a disconnection or annexation through court order is deemed to be effective 30 days after the entry of a final judgment order, unless stayed pending appeal. Thereafter, the monthly allocation made to the municipality and to any other municipality or county affected by the annexation or disconnection shall be adjusted in accordance with this Section to reflect the change in residency of the residents of the territory that was annexed or disconnected. The adjustment shall be made no later than 30 days after the Department of Revenue's receipt of the written notice of annexation or disconnection described in this Section.

(Source: P.A. 96-1040, eff. 7-14-10.)

Section 10. The Illinois Income Tax Act is amended by changing Section 901 as follows:

(35 ILCS 5/901)

(Text of Section before amendment by P.A. 101-8)

Sec. 901. Collection authority.

(a) In general. The Department shall collect the taxes imposed by this Act. The Department shall collect certified past due child support amounts under Section 2505-650 of the Department of Revenue Law of the Civil Administrative Code of Illinois. Except as provided in subsections (b), (c), (e), (f), (g), and (h) of this Section, money collected pursuant to subsections (a) and (b) of Section 201 of this Act shall be paid into the General Revenue Fund in the State treasury; money collected pursuant to subsections (c) and (d) of Section 201 of this Act shall be paid into the Personal Property Tax Replacement Fund, a special fund in the State Treasury; and money collected under Section 2505-650 of the Department of Revenue Law of the Civil Administrative Code of Illinois shall be paid into the Child Support Enforcement Trust Fund, a special fund outside the State Treasury, or to the State Disbursement Unit established under Section 10-26 of the Illinois Public Aid Code, as directed by the Department of Healthcare and Family Services.

(b) Local Government Distributive Fund. Beginning August 1, 2017, the Treasurer shall transfer each month from the General Revenue Fund to the Local Government Distributive Fund an amount equal to the sum of (i) 6.06% (10% of the ratio of the 3% individual income tax rate prior to 2011 to the 4.95% individual income tax rate after July 1, 2017) of the net revenue realized from the tax imposed by subsections (a) and (b) of Section 201 of this Act upon individuals, trusts, and estates during the preceding month and (ii) 6.85% (10% of the ratio of the 4.8% corporate income tax rate prior to 2011 to the 7% corporate income tax rate after July 1, 2017) of the net revenue realized from the tax imposed by subsections (a) and (b) of Section 201 of this Act upon corporations during the preceding month. Net revenue realized for a month shall be defined as the revenue from the tax imposed by subsections (a) and (b) of Section 201 of this Act which is deposited in the General Revenue Fund, the Education Assistance Fund, the Income Tax Surcharge Local Government Distributive Fund, the Fund for the Advancement of Education, and the Commitment to Human Services Fund during the month minus the amount paid out of the General Revenue Fund in State warrants during that same month as refunds to taxpayers for overpayment of liability under the tax imposed by subsections (a) and (b) of Section 201 of this Act.

Notwithstanding any provision of law to the contrary, beginning on July 6, 2017 (the effective date of Public Act 100-23), those amounts required under this subsection (b) to be transferred by the Treasurer into the Local Government Distributive Fund from the General Revenue Fund shall be directly deposited into the Local Government Distributive Fund as the revenue is realized from the tax imposed by subsections (a) and (b) of Section 201 of this Act.

For State fiscal year 2020 only, notwithstanding any provision of law to the contrary, the total amount of revenue and deposits under this Section attributable to revenues realized during State fiscal year 2020 shall be reduced by 5%.

(b-5) Financially Distressed Cities Allocation. The Department of Revenue shall certify to the Treasurer an amount equal to:

(1) the amount that would have been distributed under subsection (a) of Section 2 of the State Revenue Sharing Act to all financially distressed cities, as that term is defined in Section 8-12-3 of the Illinois Municipal Code, if the Treasurer had transferred under subsection (b) to the Local Government Distributive Fund a sum calculated using (i) 10% of the net revenue realized from the tax imposed by subsections (a) and (b) of Section 201 of this Act upon individuals, trusts, and estates during the preceding month and (ii) 10% of the net revenue realized from the tax imposed by subsections (a) and (b) of Section 201 of this Act upon corporations during the preceding month; and

(2) subtracting from the amount calculated under paragraph (1) the amount distributed to all financially distressed cities under subsection (a) of Section 2 of the State Revenue Sharing Act during the current month.

Upon receipt of the certification from the Department of Revenue, the Treasurer shall order transferred and the Comptroller shall transfer from the General Revenue Fund to the Local Government Distributive Fund the amount shown on the certification.

However, nothing in this subsection shall reduce an amount certified to the Comptroller under subsection (c) of Section 3-125 or subsection (b-5) of Section 4-118 of the Illinois Pension Code for failure to transmit contributions required by the financially distressed city to the Article 3 or Article 4 pension fund in its jurisdiction. The Comptroller shall continue to deduct and remit the certified amount to the Article 3 or Article 4 pension fund consistent with the requirements of subsection (c) of Section 3-125 or subsection (b-5) of Section 4-118 of the Illinois Pension Code. The Comptroller shall continue to deduct and remit all funds necessary to enforce the terms of existing settlement agreements between a municipality designated a financially distressed city and an Article 3 or Article 4 Pension Fund.

If for any reason the aggregate appropriations made available are insufficient to meet the amount certified under this subsection:

(1) The Governor shall submit to the General Assembly a proposed budget for the amount certified under this subsection from the General Revenue Fund to the Local Government Distributive Fund for each fiscal year so that the total General Revenue Fund proposed budget is no less than the amount certified under this subsection. In addition, the Governor shall specify the total amount of funds to be transferred from the General Revenue Fund to the Local Government Distributive Fund during the budget year, which shall be no less than the amount certified under this subsection. The Governor may submit a proposed budget in which the total appropriated and transferred amounts are less than the amount certified under this subsection if the Governor declares in writing to the General Assembly the reason for the lesser amounts.

(2) The General Assembly shall appropriate the amount certified under this subsection from the General Revenue Fund to the Local Government Distributive Fund for each fiscal year so that the total General Revenue Fund appropriation is no less than the amount certified under this subsection. In addition, the General Assembly shall legislatively transfer from the General Revenue Fund to the Local Government Distributive Fund for the fiscal year a total amount that is no less than the amount certified under this subsection. The General Assembly may appropriate or transfer lesser amounts if it declares by Joint Resolution the reason for the lesser amounts.

(c) Deposits Into Income Tax Refund Fund.

(1) Beginning on January 1, 1989 and thereafter, the Department shall deposit a percentage of the amounts collected pursuant to subsections (a) and (b)(1), (2), and (3) of Section 201 of this Act into a fund in the State treasury known as the Income Tax Refund Fund. Beginning with State fiscal year 1990 and for each fiscal year thereafter, the percentage deposited into the Income Tax Refund Fund during a fiscal year shall be the Annual Percentage. For fiscal year 2011, the Annual Percentage shall be 8.75%. For fiscal year 2012, the Annual Percentage shall be 8.75%. For fiscal year 2013, the Annual Percentage shall be 9.75%. For fiscal year 2014, the Annual Percentage shall be 9.5%. For fiscal year 2015, the Annual Percentage shall be 10%. For fiscal year 2018, the Annual Percentage shall be 9.8%. For fiscal year 2019, the Annual Percentage shall be 9.7%. For fiscal year 2020, the Annual Percentage shall be 9.5%. For all other fiscal years, the Annual Percentage shall be calculated as a fraction, the numerator of which shall be the amount of refunds approved for payment by the Department during the preceding fiscal year as a result of overpayment of tax liability under subsections (a) and (b)(1), (2), and (3) of Section 201 of this Act plus the amount of such refunds remaining approved but unpaid at the end of the preceding fiscal year, minus the amounts transferred into the Income Tax Refund Fund from the Tobacco Settlement Recovery Fund, and the denominator of which shall be the amounts which will be collected pursuant to subsections (a) and (b)(1), (2), and (3) of Section 201 of this Act during the preceding fiscal year; except that in State fiscal year 2002, the Annual Percentage shall in no event exceed 7.6%. The Director of Revenue shall certify the Annual Percentage to the Comptroller on the last business day of the fiscal year immediately preceding the fiscal year for which it is to be effective.

(2) Beginning on January 1, 1989 and thereafter, the Department shall deposit a percentage of the amounts collected pursuant to subsections (a) and (b)(6), (7), and (8), (c) and (d) of Section 201 of this Act into a fund in the State treasury known as the Income Tax Refund Fund. Beginning with State fiscal year 1990 and for each fiscal year thereafter, the percentage deposited into the Income Tax Refund Fund during a fiscal year shall be the Annual Percentage. For fiscal year 2011, the Annual Percentage shall be 17.5%. For fiscal year 2012, the Annual Percentage shall be 17.5%. For fiscal year 2013, the Annual Percentage shall be 14%. For fiscal year 2014, the Annual Percentage shall be 13.4%. For fiscal year 2015, the Annual Percentage shall be 14%. For fiscal year 2018, the Annual Percentage shall be 17.5%. For fiscal year 2019, the Annual Percentage shall be 15.5%. For fiscal year 2020, the Annual Percentage shall be 14.25%. For all other fiscal years, the Annual Percentage shall be calculated as a fraction, the numerator of which shall be the amount of refunds approved for payment by the Department during the preceding fiscal year as a result of overpayment of tax liability under subsections (a) and (b)(6), (7), and (8), (c) and (d) of Section 201 of this Act plus the amount of such refunds remaining approved but unpaid at the end of the preceding fiscal year, and the denominator of which shall be the amounts which will be collected pursuant to subsections (a) and (b)(6), (7), and (8), (c) and (d) of Section 201 of this Act during the preceding fiscal year; except that in State fiscal year 2002, the Annual Percentage shall in no event exceed 23%. The Director of Revenue shall certify the Annual Percentage to the Comptroller on the last business day of the fiscal year immediately preceding the fiscal year for which it is to be effective.

(3) The Comptroller shall order transferred and the Treasurer shall transfer from the Tobacco Settlement Recovery Fund to the Income Tax Refund Fund (i) $35,000,000 in January, 2001, (ii) $35,000,000 in January, 2002, and (iii) $35,000,000 in January, 2003.

(d) Expenditures from Income Tax Refund Fund.

(1) Beginning January 1, 1989, money in the Income Tax Refund Fund shall be expended exclusively for the purpose of paying refunds resulting from overpayment of tax liability under Section 201 of this Act and for making transfers pursuant to this subsection (d).

(2) The Director shall order payment of refunds resulting from overpayment of tax liability under Section 201 of this Act from the Income Tax Refund Fund only to the extent that amounts collected pursuant to Section 201 of this Act and transfers pursuant to this subsection (d) and item (3) of subsection (c) have been deposited and retained in the Fund.

(3) As soon as possible after the end of each fiscal year, the Director shall order transferred and the State Treasurer and State Comptroller shall transfer from the Income Tax Refund Fund to the Personal Property Tax Replacement Fund an amount, certified by the Director to the Comptroller, equal to the excess of the amount collected pursuant to subsections (c) and (d) of Section 201 of this Act deposited into the Income Tax Refund Fund during the fiscal year over the amount of refunds resulting from overpayment of tax liability under subsections (c) and (d) of Section 201 of this Act paid from the Income Tax Refund Fund during the fiscal year.

(4) As soon as possible after the end of each fiscal year, the Director shall order transferred and the State Treasurer and State Comptroller shall transfer from the Personal Property Tax Replacement Fund to the Income Tax Refund Fund an amount, certified by the Director to the Comptroller, equal to the excess of the amount of refunds resulting from overpayment of tax liability under subsections (c) and (d) of Section 201 of this Act paid from the Income Tax Refund Fund during the fiscal year over the amount collected pursuant to subsections (c) and (d) of Section 201 of this Act deposited into the Income Tax Refund Fund during the fiscal year.

(4.5) As soon as possible after the end of fiscal year 1999 and of each fiscal year thereafter, the Director shall order transferred and the State Treasurer and State Comptroller shall transfer from the Income Tax Refund Fund to the General Revenue Fund any surplus remaining in the Income Tax Refund Fund as of the end of such fiscal year; excluding for fiscal years 2000, 2001, and 2002 amounts attributable to transfers under item (3) of subsection (c) less refunds resulting from the earned income tax credit.

(5) This Act shall constitute an irrevocable and continuing appropriation from the Income Tax Refund Fund for the purpose of paying refunds upon the order of the Director in accordance with the provisions of this Section.

(e) Deposits into the Education Assistance Fund and the Income Tax Surcharge Local Government Distributive Fund. On July 1, 1991, and thereafter, of the amounts collected pursuant to subsections (a) and (b) of Section 201 of this Act, minus deposits into the Income Tax Refund Fund, the Department shall deposit 7.3% into the Education Assistance Fund in the State Treasury. Beginning July 1, 1991, and continuing through January 31, 1993, of the amounts collected pursuant to subsections (a) and (b) of Section 201 of the Illinois Income Tax Act, minus deposits into the Income Tax Refund Fund, the Department shall deposit 3.0% into the Income Tax Surcharge Local Government Distributive Fund in the State Treasury. Beginning February 1, 1993 and continuing through June 30, 1993, of the amounts collected pursuant to subsections (a) and (b) of Section 201 of the Illinois Income Tax Act, minus deposits into the Income Tax Refund Fund, the Department shall deposit 4.4% into the Income Tax Surcharge Local Government Distributive Fund in the State Treasury. Beginning July 1, 1993, and continuing through June 30, 1994, of the amounts collected under subsections (a) and (b) of Section 201 of this Act, minus deposits into the Income Tax Refund Fund, the Department shall deposit 1.475% into the Income Tax Surcharge Local Government Distributive Fund in the State Treasury.

(f) Deposits into the Fund for the Advancement of Education. Beginning February 1, 2015, the Department shall deposit the following portions of the revenue realized from the tax imposed upon individuals, trusts, and estates by subsections (a) and (b) of Section 201 of this Act, minus deposits into the Income Tax Refund Fund, into the Fund for the Advancement of Education:

(1) beginning February 1, 2015, and prior to February 1, 2025, 1/30; and

(2) beginning February 1, 2025, 1/26.

If the rate of tax imposed by subsection (a) and (b) of Section 201 is reduced pursuant to Section 201.5 of this Act, the Department shall not make the deposits required by this subsection (f) on or after the effective date of the reduction.

(g) Deposits into the Commitment to Human Services Fund. Beginning February 1, 2015, the Department shall deposit the following portions of the revenue realized from the tax imposed upon individuals, trusts, and estates by subsections (a) and (b) of Section 201 of this Act, minus deposits into the Income Tax Refund Fund, into the Commitment to Human Services Fund:

(1) beginning February 1, 2015, and prior to February 1, 2025, 1/30; and

(2) beginning February 1, 2025, 1/26.

If the rate of tax imposed by subsection (a) and (b) of Section 201 is reduced pursuant to Section 201.5 of this Act, the Department shall not make the deposits required by this subsection (g) on or after the effective date of the reduction.

(h) Deposits into the Tax Compliance and Administration Fund. Beginning on the first day of the first calendar month to occur on or after August 26, 2014 (the effective date of Public Act 98-1098), each month the Department shall pay into the Tax Compliance and Administration Fund, to be used, subject to appropriation, to fund additional auditors and compliance personnel at the Department, an amount equal to 1/12 of 5% of the cash receipts collected during the preceding fiscal year by the Audit Bureau of the Department from the tax imposed by subsections (a), (b), (c), and (d) of Section 201 of this Act, net of deposits into the Income Tax Refund Fund made from those cash receipts.

(Source: P.A. 100-22, eff. 7-6-17; 100-23, eff. 7-6-17; 100-587, eff. 6-4-18; 100-621, eff. 7-20-18; 100-863, eff. 8-14-18; 100-1171, eff. 1-4-19; 101-10, eff. 6-5-19; 101-81, eff. 7-12-19.)

(Text of Section after amendment by P.A. 101-8)

Sec. 901. Collection authority.

(a) In general. The Department shall collect the taxes imposed by this Act. The Department shall collect certified past due child support amounts under Section 2505-650 of the Department of Revenue Law of the Civil Administrative Code of Illinois. Except as provided in subsections (b), (c), (e), (f), (g), and (h) of this Section, money collected pursuant to subsections (a) and (b) of Section 201 of this Act shall be paid into the General Revenue Fund in the State treasury; money collected pursuant to subsections (c) and (d) of Section 201 of this Act shall be paid into the Personal Property Tax Replacement Fund, a special fund in the State Treasury; and money collected under Section 2505-650 of the Department of Revenue Law of the Civil Administrative Code of Illinois shall be paid into the Child Support Enforcement Trust Fund, a special fund outside the State Treasury, or to the State Disbursement Unit established under Section 10-26 of the Illinois Public Aid Code, as directed by the Department of Healthcare and Family Services.

(b) Local Government Distributive Fund. Beginning August 1, 2017 and continuing through January 31, 2021, the Treasurer shall transfer each month from the General Revenue Fund to the Local Government Distributive Fund an amount equal to the sum of (i) 6.06% (10% of the ratio of the 3% individual income tax rate prior to 2011 to the 4.95% individual income tax rate after July 1, 2017) of the net revenue realized from the tax imposed by subsections (a) and (b) of Section 201 of this Act upon individuals, trusts, and estates during the preceding month and (ii) 6.85% (10% of the ratio of the 4.8% corporate income tax rate prior to 2011 to the 7% corporate income tax rate after July 1, 2017) of the net revenue realized from the tax imposed by subsections (a) and (b) of Section 201 of this Act upon corporations during the preceding month. Beginning February 1, 2021, the Treasurer shall transfer each month from the General Revenue Fund to the Local Government Distributive Fund an amount equal to the sum of (i) 5.32% of the net revenue realized from the tax imposed by subsections (a) and (b) of Section 201 of this Act upon individuals, trusts, and estates during the preceding month and (ii) 6.16% of the net revenue realized from the tax imposed by subsections (a) and (b) of Section 201 of this Act upon corporations during the preceding month. Net revenue realized for a month shall be defined as the revenue from the tax imposed by subsections (a) and (b) of Section 201 of this Act which is deposited in the General Revenue Fund, the Education Assistance Fund, the Income Tax Surcharge Local Government Distributive Fund, the Fund for the Advancement of Education, and the Commitment to Human Services Fund during the month minus the amount paid out of the General Revenue Fund in State warrants during that same month as refunds to taxpayers for overpayment of liability under the tax imposed by subsections (a) and (b) of Section 201 of this Act.

Notwithstanding any provision of law to the contrary, beginning on July 6, 2017 (the effective date of Public Act 100-23), those amounts required under this subsection (b) to be transferred by the Treasurer into the Local Government Distributive Fund from the General Revenue Fund shall be directly deposited into the Local Government Distributive Fund as the revenue is realized from the tax imposed by subsections (a) and (b) of Section 201 of this Act.

For State fiscal year 2020 only, notwithstanding any provision of law to the contrary, the total amount of revenue and deposits under this Section attributable to revenues realized during State fiscal year 2020 shall be reduced by 5%.

(b-5) Financially Distressed Cities Allocation. The Department of Revenue shall certify to the Treasurer an amount equal to:

(1) the amount that would have been distributed under subsection (a) of Section 2 of the State Revenue Sharing Act to all financially distressed cities, as that term is defined in Section 8-12-3 of the Illinois Municipal Code, if the Treasurer had transferred under subsection (b) to the Local Government Distributive Fund a sum calculated using (i) 10% of the net revenue realized from the tax imposed by subsections (a) and (b) of Section 201 of this Act upon individuals, trusts, and estates during the preceding month and (ii) 10% of the net revenue realized from the tax imposed by subsections (a) and (b) of Section 201 of this Act upon corporations during the preceding month; and

(2) subtracting from the amount calculated under paragraph (1) the amount distributed to all financially distressed cities under subsection (a) of Section 2 of the State Revenue Sharing Act during the current month.

Upon receipt of the certification from the Department of Revenue, the Treasurer shall order transferred and the Comptroller shall transfer from the General Revenue Fund to the Local Government Distributive Fund the amount shown on the certification.

However, nothing in this subsection shall reduce an amount certified to the Comptroller under subsection (c) of Section 3-125 or subsection (b-5) of Section 4-118 of the Illinois Pension Code for failure to transmit contributions required by the financially distressed city to the Article 3 or Article 4 pension fund in its jurisdiction. The Comptroller shall continue to deduct and remit the certified amount to the Article 3 or Article 4 pension fund consistent with the requirements of subsection (c) of Section 3-125 or subsection (b-5) of Section 4-118 of the Illinois Pension Code. The Comptroller shall continue to deduct and remit all funds necessary to enforce the terms of existing settlement agreements between a municipality designated a financially distressed city and an Article 3 or Article 4 Pension Fund.

If for any reason the aggregate appropriations made available are insufficient to meet the amount certified under this subsection:

(1) The Governor shall submit to the General Assembly a proposed budget for the amount certified under this subsection from the General Revenue Fund to the Local Government Distributive Fund for each fiscal year so that the total General Revenue Fund proposed budget is no less than the amount certified under this subsection. In addition, the Governor shall specify the total amount of funds to be transferred from the General Revenue Fund to the Local Government Distributive Fund during the budget year, which shall be no less than the amount certified under this subsection. The Governor may submit a proposed budget in which the total appropriated and transferred amounts are less than the amount certified under this subsection if the Governor declares in writing to the General Assembly the reason for the lesser amounts.

(2) The General Assembly shall appropriate the amount certified under this subsection from the General Revenue Fund to the Local Government Distributive Fund for each fiscal year so that the total General Revenue Fund appropriation is no less than the amount certified under this subsection. In addition, the General Assembly shall legislatively transfer from the General Revenue Fund to the Local Government Distributive Fund for the fiscal year a total amount that is no less than the amount certified under this subsection. The General Assembly may appropriate or transfer lesser amounts if it declares by Joint Resolution the reason for the lesser amounts.

(c) Deposits Into Income Tax Refund Fund.

(1) Beginning on January 1, 1989 and thereafter, the Department shall deposit a percentage of the amounts collected pursuant to subsections (a) and (b)(1), (2), and (3) of Section 201 of this Act into a fund in the State treasury known as the Income Tax Refund Fund. Beginning with State fiscal year 1990 and for each fiscal year thereafter, the percentage deposited into the Income Tax Refund Fund during a fiscal year shall be the Annual Percentage. For fiscal year 2011, the Annual Percentage shall be 8.75%. For fiscal year 2012, the Annual Percentage shall be 8.75%. For fiscal year 2013, the Annual Percentage shall be 9.75%. For fiscal year 2014, the Annual Percentage shall be 9.5%. For fiscal year 2015, the Annual Percentage shall be 10%. For fiscal year 2018, the Annual Percentage shall be 9.8%. For fiscal year 2019, the Annual Percentage shall be 9.7%. For fiscal year 2020, the Annual Percentage shall be 9.5%. For all other fiscal years, the Annual Percentage shall be calculated as a fraction, the numerator of which shall be the amount of refunds approved for payment by the Department during the preceding fiscal year as a result of overpayment of tax liability under subsections (a) and (b)(1), (2), and (3) of Section 201 of this Act plus the amount of such refunds remaining approved but unpaid at the end of the preceding fiscal year, minus the amounts transferred into the Income Tax Refund Fund from the Tobacco Settlement Recovery Fund, and the denominator of which shall be the amounts which will be collected pursuant to subsections (a) and (b)(1), (2), and (3) of Section 201 of this Act during the preceding fiscal year; except that in State fiscal year 2002, the Annual Percentage shall in no event exceed 7.6%. The Director of Revenue shall certify the Annual Percentage to the Comptroller on the last business day of the fiscal year immediately preceding the fiscal year for which it is to be effective.

(2) Beginning on January 1, 1989 and thereafter, the Department shall deposit a percentage of the amounts collected pursuant to subsections (a) and (b)(6), (7), and (8), (c) and (d) of Section 201 of this Act into a fund in the State treasury known as the Income Tax Refund Fund. Beginning with State fiscal year 1990 and for each fiscal year thereafter, the percentage deposited into the Income Tax Refund Fund during a fiscal year shall be the Annual Percentage. For fiscal year 2011, the Annual Percentage shall be 17.5%. For fiscal year 2012, the Annual Percentage shall be 17.5%. For fiscal year 2013, the Annual Percentage shall be 14%. For fiscal year 2014, the Annual Percentage shall be 13.4%. For fiscal year 2015, the Annual Percentage shall be 14%. For fiscal year 2018, the Annual Percentage shall be 17.5%. For fiscal year 2019, the Annual Percentage shall be 15.5%. For fiscal year 2020, the Annual Percentage shall be 14.25%. For all other fiscal years, the Annual Percentage shall be calculated as a fraction, the numerator of which shall be the amount of refunds approved for payment by the Department during the preceding fiscal year as a result of overpayment of tax liability under subsections (a) and (b)(6), (7), and (8), (c) and (d) of Section 201 of this Act plus the amount of such refunds remaining approved but unpaid at the end of the preceding fiscal year, and the denominator of which shall be the amounts which will be collected pursuant to subsections (a) and (b)(6), (7), and (8), (c) and (d) of Section 201 of this Act during the preceding fiscal year; except that in State fiscal year 2002, the Annual Percentage shall in no event exceed 23%. The Director of Revenue shall certify the Annual Percentage to the Comptroller on the last business day of the fiscal year immediately preceding the fiscal year for which it is to be effective.

(3) The Comptroller shall order transferred and the Treasurer shall transfer from the Tobacco Settlement Recovery Fund to the Income Tax Refund Fund (i) $35,000,000 in January, 2001, (ii) $35,000,000 in January, 2002, and (iii) $35,000,000 in January, 2003.

(d) Expenditures from Income Tax Refund Fund.

(1) Beginning January 1, 1989, money in the Income Tax Refund Fund shall be expended exclusively for the purpose of paying refunds resulting from overpayment of tax liability under Section 201 of this Act and for making transfers pursuant to this subsection (d).

(2) The Director shall order payment of refunds resulting from overpayment of tax liability under Section 201 of this Act from the Income Tax Refund Fund only to the extent that amounts collected pursuant to Section 201 of this Act and transfers pursuant to this subsection (d) and item (3) of subsection (c) have been deposited and retained in the Fund.

(3) As soon as possible after the end of each fiscal year, the Director shall order transferred and the State Treasurer and State Comptroller shall transfer from the Income Tax Refund Fund to the Personal Property Tax Replacement Fund an amount, certified by the Director to the Comptroller, equal to the excess of the amount collected pursuant to subsections (c) and (d) of Section 201 of this Act deposited into the Income Tax Refund Fund during the fiscal year over the amount of refunds resulting from overpayment of tax liability under subsections (c) and (d) of Section 201 of this Act paid from the Income Tax Refund Fund during the fiscal year.

(4) As soon as possible after the end of each fiscal year, the Director shall order transferred and the State Treasurer and State Comptroller shall transfer from the Personal Property Tax Replacement Fund to the Income Tax Refund Fund an amount, certified by the Director to the Comptroller, equal to the excess of the amount of refunds resulting from overpayment of tax liability under subsections (c) and (d) of Section 201 of this Act paid from the Income Tax Refund Fund during the fiscal year over the amount collected pursuant to subsections (c) and (d) of Section 201 of this Act deposited into the Income Tax Refund Fund during the fiscal year.

(4.5) As soon as possible after the end of fiscal year 1999 and of each fiscal year thereafter, the Director shall order transferred and the State Treasurer and State Comptroller shall transfer from the Income Tax Refund Fund to the General Revenue Fund any surplus remaining in the Income Tax Refund Fund as of the end of such fiscal year; excluding for fiscal years 2000, 2001, and 2002 amounts attributable to transfers under item (3) of subsection (c) less refunds resulting from the earned income tax credit.

(5) This Act shall constitute an irrevocable and continuing appropriation from the Income Tax Refund Fund for the purpose of paying refunds upon the order of the Director in accordance with the provisions of this Section.

(e) Deposits into the Education Assistance Fund and the Income Tax Surcharge Local Government Distributive Fund. On July 1, 1991, and thereafter, of the amounts collected pursuant to subsections (a) and (b) of Section 201 of this Act, minus deposits into the Income Tax Refund Fund, the Department shall deposit 7.3% into the Education Assistance Fund in the State Treasury. Beginning July 1, 1991, and continuing through January 31, 1993, of the amounts collected pursuant to subsections (a) and (b) of Section 201 of the Illinois Income Tax Act, minus deposits into the Income Tax Refund Fund, the Department shall deposit 3.0% into the Income Tax Surcharge Local Government Distributive Fund in the State Treasury. Beginning February 1, 1993 and continuing through June 30, 1993, of the amounts collected pursuant to subsections (a) and (b) of Section 201 of the Illinois Income Tax Act, minus deposits into the Income Tax Refund Fund, the Department shall deposit 4.4% into the Income Tax Surcharge Local Government Distributive Fund in the State Treasury. Beginning July 1, 1993, and continuing through June 30, 1994, of the amounts collected under subsections (a) and (b) of Section 201 of this Act, minus deposits into the Income Tax Refund Fund, the Department shall deposit 1.475% into the Income Tax Surcharge Local Government Distributive Fund in the State Treasury.

(f) Deposits into the Fund for the Advancement of Education. Beginning February 1, 2015, the Department shall deposit the following portions of the revenue realized from the tax imposed upon individuals, trusts, and estates by subsections (a) and (b) of Section 201 of this Act, minus deposits into the Income Tax Refund Fund, into the Fund for the Advancement of Education:

(1) beginning February 1, 2015, and prior to February 1, 2025, 1/30; and

(2) beginning February 1, 2025, 1/26.

If the rate of tax imposed by subsection (a) and (b) of Section 201 is reduced pursuant to Section 201.5 of this Act, the Department shall not make the deposits required by this subsection (f) on or after the effective date of the reduction.

(g) Deposits into the Commitment to Human Services Fund. Beginning February 1, 2015, the Department shall deposit the following portions of the revenue realized from the tax imposed upon individuals, trusts, and estates by subsections (a) and (b) of Section 201 of this Act, minus deposits into the Income Tax Refund Fund, into the Commitment to Human Services Fund:

(1) beginning February 1, 2015, and prior to February 1, 2025, 1/30; and

(2) beginning February 1, 2025, 1/26.

If the rate of tax imposed by subsection (a) and (b) of Section 201 is reduced pursuant to Section 201.5 of this Act, the Department shall not make the deposits required by this subsection (g) on or after the effective date of the reduction.

(h) Deposits into the Tax Compliance and Administration Fund. Beginning on the first day of the first calendar month to occur on or after August 26, 2014 (the effective date of Public Act 98-1098), each month the Department shall pay into the Tax Compliance and Administration Fund, to be used, subject to appropriation, to fund additional auditors and compliance personnel at the Department, an amount equal to 1/12 of 5% of the cash receipts collected during the preceding fiscal year by the Audit Bureau of the Department from the tax imposed by subsections (a), (b), (c), and (d) of Section 201 of this Act, net of deposits into the Income Tax Refund Fund made from those cash receipts.

(Source: P.A. 100-22, eff. 7-6-17; 100-23, eff. 7-6-17; 100-587, eff. 6-4-18; 100-621, eff. 7-20-18; 100-863, eff. 8-14-18; 100-1171, eff. 1-4-19; 101-8, see Section 99 for effective date; 101-10, eff. 6-5-19; 101-81, eff. 7-12-19; revised 10-1-19.)

Section 15. The Illinois Municipal Code is amended by changing Sections 8-12-3, 8-12-4, 8-12-10, 8-12-18, and 8-12-24 as follows:

(65 ILCS 5/8-12-3) (from Ch. 24, par. 8-12-3)

Sec. 8-12-3. As used in this Division:

(1) "Authority" means the "(Name of Financially Distressed City) Financial Advisory Authority".

(2) "Financially distressed city" means any municipality which: is a home rule unit and which (i) is a home rule unit certified by the Department of Revenue as being in the highest 5% of all home rule municipalities in terms of the aggregate of the rate per cent of all taxes levied pursuant to statute or ordinance upon all taxable property of the municipality and as being in the lowest 5% of all home rule municipalities in terms of per capita tax yield, or is a non-home rule unit certified by the Department of Revenue as being in the highest 5% of all non-home rule municipalities in terms of the aggregate of the rate per cent of all taxes levied pursuant to statute or ordinance upon all taxable property of the municipality and as being in the lowest 5% of all non-home rule municipalities in terms of per capita tax yield; and (ii) is designated by joint resolution of the General Assembly as a financially distressed city.

(3) "Home rule municipality" means a municipality which is a home rule unit as provided in Section 6 of Article VII of the Illinois Constitution.

(4) "Budget" means an annual appropriation ordinance or annual budget as described in Division 2 of Article 8, as from time to time in effect in the financially distressed city.

(5) "Chairperson" means the chairperson of the Authority appointed pursuant to Section 8-12-7.

(6) "Financial Plan" means the financially distressed city's financial plan as developed pursuant to Section 8-12-15, as from time to time in effect.

(7) "Fiscal year" means the fiscal year of the financially distressed city.

(8) "Obligations" means bonds, notes or other evidence of indebtedness issued by the Illinois Finance Authority in connection with the provision of financial aid to a financially distressed city pursuant to this Division and applicable provisions of the Illinois Finance Authority Act.

(Source: P.A. 93-205, eff. 1-1-04.)

(65 ILCS 5/8-12-4) (from Ch. 24, par. 8-12-4)

Sec. 8-12-4. In order to receive assistance as provided in this Division, a home rule municipality shall first, by ordinance passed by its corporate authorities, request (i) that the Department of Revenue certify that it is in the highest 5% of all home rule or non-home rule municipalities, respectively, in terms of the aggregate of the rate per cent of all taxes levied pursuant to statute or ordinance upon all taxable property of the municipality and in the lowest 5% of all home rule or non-home rule municipalities, respectively, in terms of per capita tax yield, and (ii) that the General Assembly by joint resolution designate it as a financially distressed city. A home rule municipality which is so certified and designated as a financially distressed city and which desires to receive assistance as provided in this Division shall, by ordinance passed by its corporate authorities, request that a financial advisory authority be appointed for the municipality and that the municipality city and that the city receive assistance as provided in this Division, and shall file a certified copy of that ordinance with the Governor, with the Clerk of the House of Representatives and with the Secretary of the Senate. Upon the filing of the certified copies of that ordinance as required by this Section this Division and all of its provisions shall then and thereafter be applicable to the financially distressed city, shall govern and control its financial accounting, budgeting and taxing procedures and practices, and, subject to the limitations of subsection (a) of Section 8-12-22, shall remain in full force and effect with respect thereto until such time as the financial advisory authority established under Section 8-12-5 is abolished as provided in subsection (c) of Section 8-12-22.

(Source: P.A. 86-1211.)

(65 ILCS 5/8-12-10) (from Ch. 24, par. 8-12-10)

Sec. 8-12-10. Any State agency or unit of local government, within its respective function, may render such services and technical assistance to the Authority as the Authority may request. Upon the Authority's request any such agency or unit of local government may transfer to the Authority such officers and employees as the Authority and any such agency or unit of local government deem necessary to carry out the Authority's functions and duties. Officers and employees so transferred shall not lose or forfeit their employment status or rights.

(Source: P.A. 86-1211.)

(65 ILCS 5/8-12-18) (from Ch. 24, par. 8-12-18)

Sec. 8-12-18. (a) The financially distressed city shall meet its debt service obligations as they become due. No other expenditure shall be made by the city unless it is consistent with the Financial Plan and Budget in effect. The State shall not reduce revenues or impose additional costs affecting the financially distressed city, including, but not limited to, deductions from warrants under Section 10.05 of the State Comptroller Act, unless it is consistent with the Financial Plan and Budget in effect. However, nothing in this subsection shall reduce an amount certified to the Comptroller under subsection (c) of Section 3-125 or subsection (b-5) of Section 4-118 of the Illinois Pension Code for failure to transmit contributions required by the financially distressed city to the Article 3 or Article 4 pension fund in its jurisdiction. The Comptroller shall continue to deduct and remit the certified amount to the Article 3 or Article 4 pension fund consistent with the requirements of subsection (c) of Section 3-125 or subsection (b-5) of Section 4-118 of the Illinois Pension Code. The Comptroller shall continue to deduct and remit all funds necessary to enforce the terms of existing settlement agreements between a municipality designated a financially distressed city and an Article 3 or Article 4 Pension Fund. The Department of Revenue shall notify the Comptroller when a financially distressed city shall not have revenue offsets or deductions from warrants under Section 10.05 of the State Comptroller Act.

This subsection does not limit the Department of Revenue's authority to reduce revenues to correct an error.

(b) State mandates enacted while a municipality is designated as a financially distressed city that would cause the municipality to incur additional costs are not valid or enforceable against the municipality during the period when the municipality is under the financially distressed city designation.

(Source: P.A. 86-1211.)

(65 ILCS 5/8-12-24) (from Ch. 24, par. 8-12-24)

Sec. 8-12-24. A municipality home rule unit which is a financially distressed city to which this Division is applicable as provided in Section 8-12-4 may not employ financial or fiscal accounting or budgetary procedures or systems, nor place into effect any Financial Plan or Budget, nor enter into any contract or make any expenditure, nor otherwise conduct its financial and fiscal affairs or take other action in a manner inconsistent with the provisions of this Division, until such time as the powers and responsibilities of the Authority are terminated as provided in Section 8-12-22. This Section is a limitation under subsection (i) of Section 6 of Article VII of the Illinois Constitution on the concurrent exercise by home rule units which are financially distressed cities to which this Division is applicable as provided in Section 8-12-4 of powers and functions exercised by the State.

(Source: P.A. 86-1211.)

Section 95. No acceleration or delay. Where this Act makes changes in a statute that is represented in this Act by text that is not yet or no longer in effect (for example, a Section represented by multiple versions), the use of that text does not accelerate or delay the taking effect of (i) the changes made by this Act or (ii) provisions derived from any other Public Act.

Section 99. Effective date. This Act takes effect January 1, 2021.