SB0836sam001 94TH GENERAL ASSEMBLY

Sen. James F. Clayborne Jr.

Filed: 3/28/2006

09400SB0836sam001 LRB094 04462 HLH 57767 a

AMENDMENT TO SENATE BILL 836

AMENDMENT NO. ______. Amend Senate Bill 836 by replacing everything after the enacting clause with the following:

"Section 5. The Illinois Municipal Code is amended by changing Sections 8-4-1, 11-74.3-1, 11-74.3-3.1, and 11-74.3-6, by changing and renumbering Section 11-74.3-3, and by adding Sections 11-74.3-2, 11-74.3-3.2, 11-74.3-4.5, 11-74.3-5.5, and 11-74.3-7 as follows:

(65 ILCS 5/8-4-1) (from Ch. 24, par. 8-4-1)

Sec. 8-4-1. No bonds shall be issued by the corporate authorities of any municipality until the question of authorizing such bonds has been submitted to the electors of that municipality provided that notice of the bond referendum, if held before July 1, 1999, has been given in accordance with the provisions of Section 12-5 of the Election Code in effect at the time of the bond referendum, at least 10 and not more than 45 days before the date of the election, notwithstanding the time for publication otherwise imposed by Section 12-5, and approved by a majority of the electors voting upon that question. Notices required in connection with the submission of public questions on or after July 1, 1999 shall be as set forth in Section 12-5 of the Election Code. The clerk shall certify the proposition of the corporate authorities to the proper election authority who shall submit the question at an election in accordance with the general election law, subject to the notice provisions set forth in this Section.

Notice of any such election shall contain the amount of the bond issue, purpose for which issued, and maximum rate of interest.

However, without the submission of the question of issuing bonds to the electors, the corporate authorities of any municipality may authorize the issuance of any of the following bonds:

(1) Bonds to refund any existing bonded indebtedness;

(2) Bonds to fund or refund any existing judgment indebtedness;

(3) In any municipality of less than 500,000 population, bonds to anticipate the collection of installments of special assessments and special taxes against property owned by the municipality and to anticipate the collection of the amount apportioned to the municipality as public benefits under Article 9;

(4) Bonds issued by any municipality under Sections 8-4-15 through 8-4-23, 11-23-1 through 11-23-12, 11-25-1 through 11-26-6, 11-71-1 through 11-71-10, 11-74.3-1 through 11-74.3-7, 11-74.4-1 through 11-74.4-11, 11-74.5-1 through 11-74.5-15, 11-94-1 through 11-94-7, 11-102-1 through 11-102-10, 11-103-11 through 11-103-15, 11-118-1 through 11-118-6, 11-119-1 through 11-119-5, 11-129-1 through 11-129-7, 11-133-1 through 11-133-4, 11-139-1 through 11-139-12, 11-141-1 through 11-141-18 of this Code or 10-801 through 10-808 of the Illinois Highway Code, as amended;

(5) Bonds issued by the board of education of any school district under the provisions of Sections 34-30 through 34-36 of The School Code, as amended;

(6) Bonds issued by any municipality under the provisions of Division 6 of this Article 8; and by any municipality under the provisions of Division 7 of this Article 8; or under the provisions of Sections 11-121-4 and 11-121-5;

(7) Bonds to pay for the purchase of voting machines by any municipality that has adopted Article 24 of The Election Code, approved May 11, 1943, as amended;

(8) Bonds issued by any municipality under Sections 15 and 46 of the "Environmental Protection Act", approved June 29, 1970;

(9) Bonds issued by the corporate authorities of any municipality under the provisions of Section 8-4-25 of this Article 8;

(10) Bonds issued under Section 8-4-26 of this Article 8 by any municipality having a board of election commissioners;

(11) Bonds issued under the provisions of "An Act to provide the manner of levying or imposing taxes for the provision of special services to areas within the boundaries of home rule units and nonhome rule municipalities and counties", approved September 21, 1973;

(12) Bonds issued under Section 8-5-16 of this Code;

(13) Bonds to finance the cost of the acquisition, construction or improvement of water or wastewater treatment facilities mandated by an enforceable compliance schedule developed in connection with the federal Clean Water Act or a compliance order issued by the United States Environmental Protection Agency or the Illinois Pollution Control Board; provided that such bonds are authorized by an ordinance adopted by a three-fifths majority of the corporate authorities of the municipality issuing the bonds which ordinance shall specify that the construction or improvement of such facilities is necessary to alleviate an emergency condition in such municipality;

(14) Bonds issued by any municipality pursuant to Section 11-113.1-1;

(15) Bonds issued under Sections 11-74.6-1 through 11-74.6-45, the Industrial Jobs Recovery Law of this Code.

(Source: P.A. 90-706, eff. 8-7-98; 90-812, eff. 1-26-99; 91-57, eff. 6-30-99.)

(65 ILCS 5/11-74.3-1) (from Ch. 24, par. 11-74.3-1)

Sec. 11-74.3-1. Declaration of public purpose.

It is hereby found and declared:

(1) It may be considered essential to the economic and social welfare of each municipality that business districts be developed, improved, maintained and revitalized, that jobs and opportunity for employment be created within the municipality, and that, if blighting conditions are present, blighting conditions be eradicated by assuring opportunities for development or redevelopment and attracting sound and stable commercial growth.

(2) Such a result should conform with a comprehensive plan of the municipality and a specific plan for business districts officially approved by the corporate authorities of the municipality after a public hearing hearings.

(3) The exercise of the powers provided in this Division is dedicated to the promotion of the public interest, and to the enhancement of the tax base within of business districts, the creation of employment, and the eradication of blight, if present within the business district, and the use of such powers for the development and redevelopment of business districts of a municipality is hereby declared to be a public use essential to the public interest.

(Source: P.A. 78-793.)

(65 ILCS 5/11-74.3-2 new)

Sec. 11-74.3-2. Definitions. Capitalized terms used in this Division 74.3 and not otherwise defined in this Division 74.3 shall have the following meanings:

"Blighted area" means an area that, (a) by reason of the predominance of defective or inadequate street layout, unsanitary or unsafe conditions, deterioration of site improvements, improper subdivision or obsolete platting, or the existence of conditions that endanger life or property by fire or other causes, or any combination of those factors, retards the provision of housing accommodations or constitutes an economic or social liability or a menace to the public health, safety, morals, or welfare in its present condition and use, or (b) has been declared blighted or found to be a blighted area pursuant to the Tax Increment Allocation Redevelopment Act, 65 ILCS 5/11-74.4-1 et seq or the Industrial Jobs Recovery Law, 65 ILCS 5/11-74.61 et seq; or (c) is blighted pursuant to the definition of "blight" as contained in the Tax Increment Allocation Redevelopment Act, 65 ILCS 5/11-74.4-1 or the Industrial Jobs Recovery Law, 65 ILCS 5/11-74.6-1 et seq.

"Board" means the board of directors of the district.

"Business district plan" shall mean the written plan for the development or redevelopment and the construction of various physical improvements to or benefiting the district area, through the payment of business district project costs, which plan is in accordance with the requirements of this Division 74.3.

"Business district project costs" shall mean and include the sum total of all costs incurred by a district, other governmental entity or nongovernmental person in the furtherance of a business district plan or incidental to development or redevelopment within or for the benefit of the district area, including, without limitation, the following:

(1) costs of studies, surveys, development of plans and specifications, implementation and administration of a business district plan, and personnel and professional service costs for architectural, engineering, legal, marketing, financial, planning, police, fire, public works, or other services, provided that no charges for professional services may be based on a percentage of tax revenues;

(2) property assembly costs, including but not limited to, acquisition of land and other real or personal property or rights or interests therein, and specifically including payments to developers or other nongovernmental persons as reimbursement for property assembly costs incurred by that developer or other nongovernmental person;

(3) site preparation costs, including but not limited to clearance, demolition or removal of any existing buildings, structures, fixtures, utilities and improvements and clearing and grading; and including installation, repair, construction, reconstruction, extension, or relocation of public streets, public utilities, and other public site improvements within or without the district area which are essential to the preparation of the district area for the use in accordance with the business district plan, and specifically including payments to developers or other nongovernmental persons as reimbursement for site preparation costs incurred by the developer or nongovernmental person;

(4) costs of renovation, rehabilitation, reconstruction, relocation, repair or remodeling of any existing buildings, improvements, and fixtures within the district area, and specifically including payments to developers or other nongovernmental persons as reimbursement for costs incurred by those developers or nongovernmental persons;

(5) costs of installation or construction within the district area of buildings, structures, works, streets, improvements, equipment, utilities, or fixtures, and specifically including payments to developers or other nongovernmental persons as reimbursements for such costs incurred by such developer or nongovernmental person;

(6) financing costs, including but not limited to all necessary and incidental expenses related to the issuance of obligations, payment of any interest on any obligations issued under this Division 74.3 that accrues during the estimated period of construction of any development or redevelopment project for which those obligations are issued and for not exceeding 36 months thereafter, and any reasonable reserves related to the issuance of those obligations; and

(7) relocation costs to the extent that a district determines that relocation costs shall be paid or is required to make payment of relocation costs by federal or State law.

"Director" means a duly appointed director on the board of a district.

"District" shall mean either (i) a political subdivision of the State, having the district area as its corporate limits, or (ii) an area of the municipality consisting of the district area, in either case, as designated in the Development Plan and as created by a municipality in accordance with this Division 74.3.

"District area" means an improved or vacant area within a municipality and that has been established by that municipality in accordance with this Division 74.3.

"Municipality" means any city, village or incorporated town within the State.

"Municipal clerk" means the office within any municipality designated as the office with the duty and authority for keeping, maintaining, and recording the records and proceedings of that municipality.

(65 ILCS 5/11-74.3-3.1 new)

Sec. 11-74.3-3.1. Powers of Districts that are Political Subdivisions. If the business district plan provides and the district is created as a political subdivision of the State, the district shall have all powers, except to the extent any such power has been limited by the business district plan for such district approved by the municipality, to carry out and effectuate the purposes and provisions of such business district plan and this Division 74.3, including but not limited to, the following:

(1) To adopt by-laws for the district in the form provided for in the business district plan;

(2) To sue and be sued;

(3) To exercise the use of eminent domain for the acquisition of real and personal property for the purpose of implementing development or redevelopment within the district area or which benefits the district area;

(4) To acquire, manage, convey or otherwise dispose of real and personal property according to the provisions of a business district plan;

(5) To apply for and accept capital grants and loans from the United States and the state, or any instrumentality of the United States or the state, for business district development and redevelopment;

(6) To borrow funds as it may be deemed necessary to pay business district project costs, and in this connection issue one or more series of obligations or revenue bonds, bearing interest at a rate determined by the board of the district, secured by the business district tax allocation fund set forth in Section 11-74.3-6, and as it shall be deemed necessary, subject to applicable statutory limitations, including the pledge of its revenues to another authority in connection with the issuance of obligations to finance development within or for the benefit of the district area;

(7) To enter into contracts with any public or private agency or person;

(8) To sell, lease, trade or improve real property;

(9) To employ all such persons as may be necessary for the planning, administration and implementation of the business district plan;

(10) To expend such public funds as may be necessary for the planning, execution and implementation of the business district plan;

(11) To levy by resolution of the board, a retailers' occupation tax and a service occupation tax in the district area for the planning, execution, and implementation of the business district plan, to pay for business district project costs, and to pay any obligations issued to finance business district project costs, to the extent such taxes are authorized by the business district plan approved by the municipality;

(12) To impose by resolution a hotel operators' occupation tax within the business district for the planning, execution, and implementation of business district plans and to pay for the business district project costs as set forth in the business district plan approved by the municipality;

(13) To utilize revenues received under this Division from one district area for eligible business district project costs in another district area that is contiguous to, or is separated only by a public right of way from, the district area from which the revenues are received, provided that any transfer or loan of revenues received from one district area to another district area shall have first been approved in the business district plan approved for each district area.

In addition to the foregoing, each district area which is located within a blighted area or includes a blighted area, shall have the additional power to expend its revenues or loan its revenues pursuant to a contract with any private property owner to improve such private property, provided that such improvements are reasonably anticipated to remediate some or all of the blighting conditions and are in the furtherance of the objectives of the business district plan.

(65 ILCS 5/11-74.3-3.2) (from Ch. 24, par. 11-74.3-3, was

65 ILCS 5/11-74.3-3)

Sec. 11-74.3-3.2 11-74.3-3. Powers of municipality with respect to districts that are not political subdivisions. If the business district plan provides and the district is created as an area of the municipality and not a separate political subdivision, in In carrying out a business district development or redevelopment plan, the corporate authorities of each municipality shall have the following powers:

(1) To approve all development and redevelopment proposals for a business district.

(2) To exercise the use of eminent domain for the acquisition of real and personal property for the purpose of a development or redevelopment project.

(3) To acquire, manage, convey or otherwise dispose of real and personal property according to the provisions of a development or redevelopment plan.

(4) To apply for and accept capital grants and loans from the United States and the State of Illinois, or any instrumentality of the United States or the State, for business district development and redevelopment.

(5) To borrow funds as it may be deemed necessary for the purpose of business district development and redevelopment, and in this connection issue such obligation or revenue bonds as it shall be deemed necessary, subject to applicable statutory limitations.

(6) To enter into contracts with any public or private agency or person.

(7) To sell, lease, trade or improve real property in connection with business district development and redevelopment plans.

(8) To employ all such persons as may be necessary for the planning, administration and implementation of business district plans.

(9) To expend such public funds as may be necessary for the planning, execution and implementation of the business district plans.

(10) To establish by ordinance or resolution procedures for the planning, execution and implementation of business district plans.

(11) To create a Business District Development and Redevelopment Commission to act as agent for the municipality for the purposes of business district development and redevelopment.

(12) To impose a retailers' occupation tax and a service occupation tax in the business district for the planning, execution, and implementation of business district plans and to pay for business district project costs as set forth in the business district plan approved by the municipality.

(13) To impose a hotel operators' occupation tax in the business district for the planning, execution, and implementation of business district plans and to pay for the business district project costs as set forth in the business district plan approved by the municipality.

(14) To issue obligations in one or more series bearing interest at rates determined by the corporate authorities of the municipality by ordinance and secured by the business district tax allocation fund set forth in Section 11-74.3-6 for the business district to provide for the payment of business district project costs.

(15) To utilize revenues received under this Division from one district area for eligible business district project costs in another business district area that is contiguous to, or is separated only by a public right of way, the district area from which the revenues are received, provided that any transfer or loan of revenues from one district area to another area shall have first been approved in the business district plan approved for each district area.

The powers granted to municipalities in this division shall not be construed as a limitation on the powers of a home rule municipality granted by Article VII of the Illinois Constitution.

This amendatory Act of the 91st General Assembly is declarative of existing law and is not a new enactment.

(Source: P.A. 93-1053, eff. 1-1-05.)

(65 ILCS 5/11-74.3-4.5 new)

Sec. 11-74.3-4.5. Establishment of districts. The corporate authorities of a municipality may establish one or more districts in the manner provided in this Section 11-74.3-4. The following procedures shall apply to the establishment of a district:

(1) Business district plan. The corporate authorities of the municipality shall cause to be prepared a business district plan, which shall:

(a) designate whether the district is to be a separate political subdivision of the State, or not a separate political subdivision but a district of the municipality;

(b) set forth a specific description of the boundaries of the proposed district area;

(c) contain a map illustrating the boundaries of the proposed district area;

(d) contain a general description of each project proposed to be undertaken within or for the benefit of the district area, including a description of the approximate location of each project;

(e) set forth the name of the proposed district;

(f) if the district is to be a separate political subdivision, set forth the number of directors to be on the district's board;

(g) set forth an estimate of business district project costs reasonably anticipated to be paid or incurred;

(h) set forth the anticipated source of funds to pay business district project costs;

(i) set forth the anticipated nature and term of any obligations to be issued; and

(j) if the district is to be a separate political subdivision, the form of the proposed by-laws by which the board shall govern the district.

The business district plan shall be placed on file with the municipal clerk and available for review by any interested party on or before the date notice of the public hearing is first published or mailed.

(2) Amendments to the plan.

(a) Amendments to a business district plan may be made that do not change the proposed boundaries of the proposed district area if the following times and the following requirements have been met:

(i) At any time prior to the close of the public hearing required pursuant to subdivision (3) of this Section; provided that, notice of the contents of the amendment to the business district plan is given at the public hearing.

(ii) At any time after the public hearing and prior to the adoption of an ordinance adopting the proposed district; provided that, notice of the amendments to the business district plan is given by publishing the notice in a newspaper of general circulation within the municipality and by sending the notice by registered or certified United States mail with a return receipt attached to the address of record of each owner of record of real property within the boundaries of the proposed district area per the tax records of the county clerk. Such notice shall be published and mailed not less than 10 days prior to the adoption of the ordinance establishing the district.

(b) Amendments to a business district plan that change the proposed boundaries of the proposed district area and amendments to the business district plan made at any time after the adoption of any ordinance establishing the district, may be made by adoption by the governing body of the municipality in which the district is located of an ordinance approving the amendment to the business district plan, after a public hearing on the amendment to the business district plan is held and notice of the public hearing is given in the manner provided in subdivision (3) of this Section.

(3) Public hearing. The corporate authorities of the municipality shall conduct a public hearing at which members of the general public shall be given an opportunity to be heard regarding the terms of the business district plan and the establishment of the district. All reasonable protests, objections and endorsements shall be heard at the public hearing; provided, however, that the corporate authorities of the municipality may establish reasonable rules regarding the length of time provided to members of the general public. The public hearing may be continued to another date without further notice other than a motion to be entered upon the minutes fixing the date, time, and place of the continuance of the public hearing. Notice of the public hearing shall be given as follows:

(a) Notice by publication shall be given in a newspaper of general circulation within the municipality, published twice, the first publication to be not more than 30 days and the last publication to not be less than 10 days prior to the date of the public hearing.

(b) Notice by mail shall be given to the record owner, based on the assessor's records as of the date that is not more than 30 days and not less than 15 days prior to the date of the public hearing, of fee simple title to all real property located within the proposed district area, which notices shall be sent by certified United States mail, return receipt requested.

(c) Each notice shall contain the following information:

(i) the date, time, and place of the public hearing;

(ii) a statement that the business district plan has been filed with the municipal clerk of the municipality and is available for review at the office of the municipal clerk during the municipality's regular business hours;

(iii) the boundaries and map of the proposed district, as contained in the business district plan, provided that a map shall not be required with respect to any published notice; and

(iv) a statement that all interested persons shall be given an opportunity to be heard at the public hearing.

(4) Establishment of district by ordinance. After the final adjournment of the public hearing required by subdivision (3) of this Section, the corporate authorities of the municipality may establish the district by adopting an ordinance approving the business district plan, establishing the district, and making the following findings:

(a) the proposed district area is contiguous; and

(b) the proposed business district plan conforms to the comprehensive plan of the municipality as a whole, or, for municipalities with a population of 100,000 or more, (i) conforms to the strategic economic development plan or redevelopment plan, if any, issued by the designated planning authority of the municipality or (ii) includes uses that have been approved by the planning commission of the municipality.

The establishment ordinance may include the finding that the district is a blighted area.

(65 ILCS 5/11-74.3-5.5 new)

Sec. 11-74.3-5.5. Governance by Board of directors; election; qualifications.

(1) If the district is to be a separate political subdivision of the State, the district shall be governed by a board consisting of the number of directors as set forth in the business district plan, of which there shall be at least 5 but not more than 10 directors. Each director shall, during his or her entire term:

(a) be at least 18 years of age; and

(b) have any other qualifications that may be set forth in the business district plan.

(2) If the district is to be a separate political subdivision of the State, directors shall be appointed by the chief elected officer of the municipality with the consent of the corporate authorities of the municipality. One-half of the initial directors shall be appointed to serve a 3-year term, one-half shall be appointed to serve for a 2-year term, and if an odd number of directors are to be initially appointed, the odd Director shall serve for a 2-year term; provided that each director shall serve until that director's successor is appointed. Each successor director shall serve a term of 2 years; provided that the term shall continue until the director's successor is appointed. In the event of a vacancy on the board of directors, the municipality shall appoint, in the manner described in this subdivision (2), an interim director to fill the vacancy for the unexpired term.

(3) If the district is to be a separate political subdivision of the State, any director may be removed for cause by a two-thirds affirmative vote of the directors of the board. Written notice of the proposed removal shall be given to all directors prior to action thereon. A director may not be removed by the municipality or the board without cause.

(4) If the district is to be a separate political subdivision of the State, the board shall possess and exercise all of the district's legislative and executive powers. A simple majority of the board shall constitute a quorum. If a quorum exists, a majority of those voting shall have the authority to act in the name of the board and to approve any resolution. Each director shall devote such time to the duties of the office as the faithful discharge thereof may require and may be reimbursed for his or her actual expenditures in the performance of duties on behalf of the district. Meetings and actions of the board shall otherwise be governed by the terms of the district's by-laws. The board may appoint officers and delegate its executive power to such officer to the extent provided for in the by-laws, the form of which is to be contained in the business district plan.

(65 ILCS 5/11-74.3-6)

Sec. 11-74.3-6. Business district revenue and obligations.

(a) If the corporate authorities of a municipality have approved a business district development or redevelopment plan and have elected to impose a tax by ordinance pursuant to subsections (b), (c), or (d) of this Section, or the board of a district has elected to impose a tax by resolution pursuant to subsection (b), (c), or (d), then each year after the date of the approval of the ordinance and until all business district project costs and all municipal obligations financing the business district project costs, if any, have been paid in accordance with the business district development or redevelopment plan, but in no event longer than 23 years after the date of adoption of the ordinance or resolution approving the tax business district development or redevelopment plan, all amounts generated by the retailers' occupation tax and service occupation tax shall be collected and the tax shall be enforced by the Department of Revenue in the same manner as all retailers' occupation taxes and service occupation taxes imposed in the municipality imposing the tax or the municipality in which the district is located, and all amounts generated by the hotel operators' occupation tax shall be collected and the tax shall be enforced by the municipality or the district in the same manner as all hotel operators' occupation taxes imposed in the municipality imposing the tax or the municipality in which the district is located. The corporate authorities of the municipality shall deposit the proceeds of the taxes imposed under subsections (b), (c), and (d) into a special fund held by the corporate authorities of the municipality called the Business District Tax Allocation Fund for the purpose of paying business district project costs and obligations incurred in the payment of those costs.

(b) The corporate authorities of a municipality that has established a business district under this Division 74.3 or a district which is established by a municipality as a political subdivision of the State may, by ordinance or resolution, impose a Business District Retailers' Occupation Tax upon all persons engaged in the business of selling tangible personal property, other than an item of tangible personal property titled or registered with an agency of this State's government, at retail in the business district at a rate not to exceed 1% of the gross receipts from the sales made in the course of such business, to be imposed only in 0.25% increments. The tax may not be imposed on food for human consumption that is to be consumed off the premises where it is sold (other than alcoholic beverages, soft drinks, and food that has been prepared for immediate consumption), prescription and nonprescription medicines, drugs, medical appliances, modifications to a motor vehicle for the purpose of rendering it usable by a disabled person, and insulin, urine testing materials, syringes, and needles used by diabetics, for human use.

The tax imposed under this subsection and all civil penalties that may be assessed as an incident thereof shall be collected and enforced by the Department of Revenue. The certificate of registration that is issued by the Department to a retailer under the Retailers' Occupation Tax Act shall permit the retailer to engage in a business that is taxable under any ordinance or resolution enacted pursuant to this subsection without registering separately with the Department under such ordinance or resolution or under this subsection. The Department of Revenue shall have full power to administer and enforce this subsection; to collect all taxes and penalties due under this subsection in the manner hereinafter provided; and to determine all rights to credit memoranda arising on account of the erroneous payment of tax or penalty under this subsection. In the administration of, and compliance with, this subsection, the Department and persons who are subject to this subsection shall have the same rights, remedies, privileges, immunities, powers and duties, and be subject to the same conditions, restrictions, limitations, penalties, exclusions, exemptions, and definitions of terms and employ the same modes of procedure, as are prescribed in Sections 1, 1a through 1o, 2 through 2-65 (in respect to all provisions therein other than the State rate of tax), 2c through 2h, 3 (except as to the disposition of taxes and penalties collected), 4, 5, 5a, 5c, 5d, 5e, 5f, 5g, 5i, 5j, 5k, 5l, 6, 6a, 6b, 6c, 7, 8, 9, 10, 11, 12, 13, and 14 of the Retailers' Occupation Tax Act and all provisions of the Uniform Penalty and Interest Act, as fully as if those provisions were set forth herein.

Persons subject to any tax imposed under this subsection may reimburse themselves for their seller's tax liability under this subsection by separately stating the tax as an additional charge, which charge may be stated in combination, in a single amount, with State taxes that sellers are required to collect under the Use Tax Act, in accordance with such bracket schedules as the Department may prescribe.

Whenever the Department determines that a refund should be made under this subsection to a claimant instead of issuing a credit memorandum, the Department shall notify the State Comptroller, who shall cause the order to be drawn for the amount specified and to the person named in the notification from the Department. The refund shall be paid by the State Treasurer out of the business district retailers' occupation tax fund.

The Department shall immediately pay over to the State Treasurer, ex officio, as trustee, all taxes, penalties, and interest collected under this subsection for deposit into the business district retailers' occupation tax fund. On or before the 25th day of each calendar month, the Department shall prepare and certify to the Comptroller the disbursement of stated sums of money to named municipalities or district, as applicable, from the business district retailers' occupation tax fund, the municipalities or districts to be those from which retailers have paid taxes or penalties under this subsection to the Department during the second preceding calendar month. The amount to be paid to each municipality or district shall be the amount (not including credit memoranda) collected under this subsection during the second preceding calendar month by the Department plus an amount the Department determines is necessary to offset any amounts that were erroneously paid to a different taxing body, and not including an amount equal to the amount of refunds made during the second preceding calendar month by the Department, less 2% of that amount, which shall be deposited into the Tax Compliance and Administration Fund and shall be used by the Department, subject to appropriation, to cover the costs of the Department in administering and enforcing the provisions of this subsection, on behalf of such municipality or district, and not including any amount that the Department determines is necessary to offset any amounts that were payable to a different taxing body but were erroneously paid to the municipality or district. Within 10 days after receipt by the Comptroller of the disbursement certification to the municipalities or district provided for in this subsection to be given to the Comptroller by the Department, the Comptroller shall cause the orders to be drawn for the respective amounts in accordance with the directions contained in the certification. The proceeds of the tax paid to municipalities or districts under this subsection shall be deposited into the Business District Tax Allocation Fund by the municipality or district, as applicable.

An ordinance or resolution imposing or discontinuing the tax under this subsection or effecting a change in the rate thereof shall either (i) be adopted and a certified copy thereof filed with the Department on or before the first day of April, whereupon the Department, if all other requirements of this subsection are met, shall proceed to administer and enforce this subsection as of the first day of July next following the adoption and filing; or (ii) be adopted and a certified copy thereof filed with the Department on or before the first day of October, whereupon, if all other requirements of this subsection are met, the Department shall proceed to administer and enforce this subsection as of the first day of January next following the adoption and filing.

The Department of Revenue shall not administer or enforce a resolution or an ordinance imposing, discontinuing, or changing the rate of the tax under this subsection, until the municipality or district also provides, in the manner prescribed by the Department, the boundaries of the business district area in such a way that the Department can determine by its address whether a business is located in the business district area. The municipality or district must provide this boundary information to the Department on or before April 1 for administration and enforcement of the tax under this subsection by the Department beginning on the following July 1 and on or before October 1 for administration and enforcement of the tax under this subsection by the Department beginning on the following January 1. The Department of Revenue shall not administer or enforce any change made to the boundaries of the a business district area until the municipality or district, as applicable, reports the boundary change to the Department in the manner prescribed by the Department. The municipality or district, as applicable, must provide this boundary change information to the Department on or before April 1 for administration and enforcement by the Department of the change beginning on the following July 1 and on or before October 1 for administration and enforcement by the Department of the change beginning on the following January 1. The retailers in the business district area shall be responsible for charging the tax imposed under this subsection. If a retailer is incorrectly included or excluded from the list of those required to collect the tax under this subsection, both the Department of Revenue and the retailer shall be held harmless if they reasonably relied on information provided by the municipality or district.

A municipality or district that imposes the tax under this subsection must submit to the Department of Revenue any other information as the Department may require for the administration and enforcement of the tax.

When certifying the amount of a monthly disbursement to a municipality or district under this subsection, the Department shall increase or decrease the amount by an amount necessary to offset any misallocation of previous disbursements. The offset amount shall be the amount erroneously disbursed within the previous 6 months from the time a misallocation is discovered.

Nothing in this subsection shall be construed to authorize the municipality or the district to impose a tax upon the privilege of engaging in any business which under the Constitution of the United States may not be made the subject of taxation by this State.

If a tax is imposed under this subsection (b), a tax shall also be imposed under subsection (c) of this Section.

(c) If a tax has been imposed under subsection (b), a Business District Service Occupation Tax shall also be imposed upon all persons engaged, within in the business district area, in the business of making sales of service, who, as an incident to making those sales of service, transfer tangible personal property within the business district area, either in the form of tangible personal property or in the form of real estate as an incident to a sale of service. The tax shall be imposed at the same rate as the tax imposed in subsection (b) and shall not exceed 1% of the selling price of tangible personal property so transferred within the business district area, to be imposed only in 0.25% increments. The tax may not be imposed on food for human consumption that is to be consumed off the premises where it is sold (other than alcoholic beverages, soft drinks, and food that has been prepared for immediate consumption), prescription and nonprescription medicines, drugs, medical appliances, modifications to a motor vehicle for the purpose of rendering it usable by a disabled person, and insulin, urine testing materials, syringes, and needles used by diabetics, for human use.

The tax imposed under this subsection and all civil penalties that may be assessed as an incident thereof shall be collected and enforced by the Department of Revenue. The certificate of registration which is issued by the Department to a retailer under the Retailers' Occupation Tax Act or under the Service Occupation Tax Act shall permit such registrant to engage in a business which is taxable under any ordinance or resolution enacted pursuant to this subsection without registering separately with the Department under such ordinance or resolution or under this subsection. The Department of Revenue shall have full power to administer and enforce this subsection; to collect all taxes and penalties due under this subsection; to dispose of taxes and penalties so collected in the manner hereinafter provided; and to determine all rights to credit memoranda arising on account of the erroneous payment of tax or penalty under this subsection. In the administration of, and compliance with this subsection, the Department and persons who are subject to this subsection shall have the same rights, remedies, privileges, immunities, powers and duties, and be subject to the same conditions, restrictions, limitations, penalties, exclusions, exemptions, and definitions of terms and employ the same modes of procedure as are prescribed in Sections 2, 2a through 2d, 3 through 3-50 (in respect to all provisions therein other than the State rate of tax), 4 (except that the reference to the State shall be to the business district), 5, 7, 8 (except that the jurisdiction to which the tax shall be a debt to the extent indicated in that Section 8 shall be the municipality or the district as applicable), 9 (except as to the disposition of taxes and penalties collected, and except that the returned merchandise credit for this tax may not be taken against any State tax), 10, 11, 12 (except the reference therein to Section 2b of the Retailers' Occupation Tax Act), 13 (except that any reference to the State shall mean the municipality or district, as applicable), the first paragraph of Section 15, and Sections 16, 17, 18, 19 and 20 of the Service Occupation Tax Act and all provisions of the Uniform Penalty and Interest Act, as fully as if those provisions were set forth herein.

Persons subject to any tax imposed under the authority granted in this subsection may reimburse themselves for their serviceman's tax liability hereunder by separately stating the tax as an additional charge, which charge may be stated in combination, in a single amount, with State tax that servicemen are authorized to collect under the Service Use Tax Act, in accordance with such bracket schedules as the Department may prescribe.

Whenever the Department determines that a refund should be made under this subsection to a claimant instead of issuing credit memorandum, the Department shall notify the State Comptroller, who shall cause the order to be drawn for the amount specified, and to the person named, in such notification from the Department. Such refund shall be paid by the State Treasurer out of the business district retailers' occupation tax fund.

The Department shall forthwith pay over to the State Treasurer, ex-officio, as trustee, all taxes, penalties, and interest collected under this subsection for deposit into the business district retailers' occupation tax fund. On or before the 25th day of each calendar month, the Department shall prepare and certify to the Comptroller the disbursement of stated sums of money to named municipalities and districts from the business district retailers' occupation tax fund, the municipalities and districts to be those from which suppliers and servicemen have paid taxes or penalties under this subsection to the Department during the second preceding calendar month. The amount to be paid to each municipality or district shall be the amount (not including credit memoranda) collected under this subsection during the second preceding calendar month by the Department, less 2% of that amount, which shall be deposited into the Tax Compliance and Administration Fund and shall be used by the Department, subject to appropriation, to cover the costs of the Department in administering and enforcing the provisions of this subsection, and not including an amount equal to the amount of refunds made during the second preceding calendar month by the Department on behalf of such municipality or district . Within 10 days after receipt, by the Comptroller, of the disbursement certification to the municipalities and districts, provided for in this subsection to be given to the Comptroller by the Department, the Comptroller shall cause the orders to be drawn for the respective amounts in accordance with the directions contained in such certification. The proceeds of the tax paid to municipalities or districts under this subsection shall be deposited into the Business District Tax Allocation Fund by the municipality.

An ordinance or resolution imposing or discontinuing the tax under this subsection or effecting a change in the rate thereof shall either (i) be adopted and a certified copy thereof filed with the Department on or before the first day of April, whereupon the Department, if all other requirements of this subsection are met, shall proceed to administer and enforce this subsection as of the first day of July next following the adoption and filing; or (ii) be adopted and a certified copy thereof filed with the Department on or before the first day of October, whereupon, if all other conditions of this subsection are met, the Department shall proceed to administer and enforce this subsection as of the first day of January next following the adoption and filing.

The Department of Revenue shall not administer or enforce an ordinance imposing, discontinuing, or changing the rate of the tax under this subsection, until the municipality or districts, as applicable, also provides, in the manner prescribed by the Department, the boundaries of the business district area in such a way that the Department can determine by its address whether a business is located in the business district area. The municipality or district, as applicable, must provide this boundary information to the Department on or before April 1 for administration and enforcement of the tax under this subsection by the Department beginning on the following July 1 and on or before October 1 for administration and enforcement of the tax under this subsection by the Department beginning on the following January 1. The Department of Revenue shall not administer or enforce any change made to the boundaries of a business district area until the municipality or district, as applicable, reports the boundary change to the Department in the manner prescribed by the Department. The municipality must provide this boundary change information to the Department on or before April 1 for administration and enforcement by the Department of the change beginning on the following July 1 and on or before October 1 for administration and enforcement by the Department of the change beginning on the following January 1. The retailers in the business district area shall be responsible for charging the tax imposed under this subsection. If a retailer is incorrectly included or excluded from the list of those required to collect the tax under this subsection, both the Department of Revenue and the retailer shall be held harmless if they reasonably relied on information provided by the municipality or district .

A municipality or district, as applicable, that imposes the tax under this subsection must submit to the Department of Revenue any other information as the Department may require for the administration and enforcement of the tax.

Nothing in this subsection shall be construed to authorize the municipality to impose a tax upon the privilege of engaging in any business which under the Constitution of the United States may not be made the subject of taxation by the State.

If a tax is imposed under this subsection (c), a tax shall also be imposed under subsection (b) of this Section.

(d) By ordinance, a municipality that has established a business district under this Division 74.3, or, by resolution, a district established as a political subdivision in accordance with this Division 74.3, may impose an occupation tax upon all persons engaged in the business district area in the business of renting, leasing, or letting rooms in a hotel, as defined in the Hotel Operators' Occupation Tax Act, at a rate not to exceed 1% of the gross rental receipts from the renting, leasing, or letting of hotel rooms within the business district, to be imposed only in 0.25% increments, excluding, however, from gross rental receipts the proceeds of renting, leasing, or letting to permanent residents of a hotel, as defined in the Hotel Operators' Occupation Tax Act, and proceeds from the tax imposed under subsection (c) of Section 13 of the Metropolitan Pier and Exposition Authority Act.

The tax imposed by the municipality or district, as applicable, under this subsection and all civil penalties that may be assessed as an incident to that tax shall be collected and enforced by the municipality or district imposing the tax. The municipality or district, as applicable, shall have full power to administer and enforce this subsection, to collect all taxes and penalties due under this subsection, to dispose of taxes and penalties so collected in the manner provided in this subsection, and to determine all rights to credit memoranda arising on account of the erroneous payment of tax or penalty under this subsection. In the administration of and compliance with this subsection, the municipality, district and persons who are subject to this subsection shall have the same rights, remedies, privileges, immunities, powers, and duties, shall be subject to the same conditions, restrictions, limitations, penalties, and definitions of terms, and shall employ the same modes of procedure as are employed with respect to a tax adopted by the municipality under Section 8-3-14 of this Code.

Persons subject to any tax imposed under the authority granted in this subsection may reimburse themselves for their tax liability for that tax by separately stating that tax as an additional charge, which charge may be stated in combination, in a single amount, with State taxes imposed under the Hotel Operators' Occupation Tax Act, and with any other tax.

Nothing in this subsection shall be construed to authorize a municipality to impose a tax upon the privilege of engaging in any business which under the Constitution of the United States may not be made the subject of taxation by this State.

The proceeds of the tax imposed under this subsection shall be deposited into the Business District Tax Allocation Fund.

(e) Obligations secured by the district allocation fund pursuant to subsection (6) of Section 11-74.3-3.1 or subsection (14) of Section 11-74.3-3.2 may be issued by the district, the municipality, or other issuing authority to pay for the business district project costs. These obligations shall be retired from issued pursuant to subsection (14) of Section 11-74.3-3 shall be retired in the manner provided in the ordinance authorizing the issuance of those obligations by the receipts of taxes levied as authorized in subsections (11) and (12) of Section 11-74.3-3.1 or subsections (12) and (13) of Section 11-74.3-3.2 in the manner provided in the resolution of the district authorizing the pledge of such funds to be deposited in the district tax allocation fund. The district or municipality, as applicable, may pledge all or any part of the amounts in and to be deposited into the Business District Allocation Fund to the payment of business district project costs and obligations. subsections (12) and (13) of Section 11-74.3-3. The ordinance shall pledge all of the amounts in and to be deposited in the Business District Tax Allocation Fund to the payment of business district project costs and obligations. Obligations issued pursuant to subsection (14) of Section 11-74.3-3 may be sold at public or private sale at a price determined by the corporate authorities of the municipality and no referendum approval of the electors shall be required as a condition to the issuance of those obligations. The resolution or ordinance authorizing the obligations may include require that the obligations contain a recital that they are issued pursuant to either Section 11-74.3-3.1 or Section 11-74.3-3.2, as applicable, subsection (14) of Section 11-74.3-3 and this recital shall be conclusive evidence of their validity and of the regularity of their issuance. These obligations shall bear such date or dates and mature at such time or times not later than 23 years from the date the resolution of the district imposed the taxes authorized under this Division. No referendum approval of the electors shall be required as a condition precedent to the issuance of obligations pursuant to this Division. The district, municipality, or other issuing authority The corporate authorities of the municipality may also issue its obligations to refund, in whole or in part, obligations previously issued by the district, municipality, or other issuing authority under the authority of this Code, whether at or prior to maturity, provided that the last of the refunding obligations shall not mature later than 23 years from the date the resolution of the district imposed the taxes authorized under this Division. In the event a municipality issues obligations under home rule powers or other legislative authority, or another issuing authority issues obligations under other legislative authority, and the proceeds of those obligations are pledged to pay business district project costs, the municipality or other issuing authority may, if it has followed the procedures set forth in this Division, retire those obligations from funds in the district tax allocation fund in amount and in such manner as if those obligations had been issued pursuant to the provisions of this Division. No obligations issued pursuant to this Division shall . All obligations issued pursuant to subsection (14) of Section 11-74.3-3 shall not be regarded as indebtedness of the district, municipality, or other issuing authority issuing those the obligations for the purpose of any limitation imposed by law.

(f) When business district project costs business district costs, including, without limitation, all district municipal obligations financing business district project costs incurred under either Section 11-74.3-3.1 or Section 11-74.3-3.2, as applicable, Section 11-74.3-3 have been paid, any surplus funds then remaining in the Business District Tax Allocation Fund shall be distributed to the municipal treasurer for deposit into the municipal general corporate fund. Upon payment of all business district project costs and retirement of obligations, but in no event more than 23 years after the date of adoption of the ordinance or resolution approving the taxes imposed pursuant to subsections (11) and (12) of Section 11-74.3-3.1 or subsections (12) and (13) of Section 11-74.3-3.2, as applicable, the district or municipality shall adopt a resolution ordinance approving the business district development or redevelopment plan, the municipality shall adopt an ordinance immediately rescinding the taxes imposed pursuant to subsections (11) and (12) of Sections 11-74.3-3.1 or subsections (12) and (13) of Section 11-74.3-3.2, as applicable 11-74.3-3.

(Source: P.A. 93-1053, eff. 1-1-05; 93-1089, eff. 3-7-05.)

(65 ILCS 5/11-74.3-7 new)

Sec. 11-74.3-7. Existing districts. Districts that were established prior to the effective date of this amendatory Act of the 94th General Assembly shall continue to operate and be governed by the terms of this Division in effect prior to the effective date of this amendatory Act of the 94th General Assembly. A district established prior to the effective date of this amendatory Act of the 94th General Assembly may become a separate political subdivision of the State in accordance with the terms of this amendatory Act of the 94th General Assembly by the municipality by causing an amendment to be made to its business district plan in accordance with the process provided for in this amendatory Act of the 94th General Assembly, in which case any taxes levied by the municipality within the district prior to the district becoming a separate political subdivision, shall automatically be rescinded, subject to levying by the district of the taxes contemplated by this Division in accordance with the procedures provided for in this amendatory Act.

(65 ILCS 5/11-74.3-2 rep.)

(65 ILCS 5/11-74.3-4 rep.)

(65 ILCS 5/11-74.3-5 rep.)

Section 10. The Illinois Municipal Code is amended by repealing Sections 11-74.3-2 (as added by Public Act 78-793), 11-74.3-4 and 11-74.3-5.

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