SB3382 97TH GENERAL ASSEMBLY

LRB097 18949 HLH 64187 b

97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
SB3382

Introduced 2/7/2012, by Sen. Michael Noland

SYNOPSIS AS INTRODUCED:

20 ILCS 620/4	from Ch. 67 1/2, par. 1004
20 ILCS 620/7.5 new

Amends the Economic Development Area Tax Increment Allocation Act. Provides that no economic development area may be established or extended without the written approval of the taxing districts comprising a majority of the total amount of taxes extended within the economic development area in the previous taxable year. Provides that no direct or indirect rights or privileges conveyed to any corporation under an economic development plan or agreement may be transferred to a developer's successor entity without the express, written approval of each taxing district located within the economic development area. Provides that the portion of the taxes extended by a school district located in an economic development project area may not be paid into the special tax allocation fund without the express written permission of the school district. Provides that assets purchased by the Administrator to further the development of the economic development area may not be transferred out of the economic development area or otherwise used by the Administrator for development activities or services that are not related to the economic development area.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning revenue.

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

Section 5. The Economic Development Area Tax Increment Allocation Act is amended by changing Sections 4 and 7.5 as follows:

(20 ILCS 620/4) (from Ch. 67 1/2, par. 1004)

(Text of Section before amendment by P.A. 97-636)

Sec. 4. Establishment of economic development project areas; ordinance; notice; hearing; changes in economic development plan. Economic development project areas shall be established as follows:

(a) The corporate authorities of a municipality shall by ordinance propose the establishment of an economic development project area and fix a time and place for a public hearing, and shall submit a certified copy of the ordinance as adopted to the Department.

(b)(1) Notice of the public hearing shall be given by publication and mailing. Notice by publication shall be given by publication at least twice, the first publication to be not more than 30 nor less than 10 days prior to the hearing in a newspaper of general circulation within the taxing districts having property in the proposed economic development project area. Notice by mailing shall be given by depositing such notice together with a copy of the proposed economic development plan in the United States mails by certified mail addressed to the person or persons in whose name the general taxes for the last preceding year were paid on each lot, block, tract, or parcel of land lying within the economic development project area. The notice shall be mailed not less than 10 days prior to the date set for the public hearing. In the event taxes for the last preceding year were not paid, the notice shall also be sent to the persons last listed on the tax rolls within the preceding 3 years as the owners of such property.

(2) The notices issued pursuant to this Section shall include the following:

(A) The time and place of public hearing;

(B) The boundaries of the proposed economic development project area by legal description and by street location where possible;

(C) A notification that all interested persons will be given an opportunity to be heard at the public hearing;

(D) An invitation for any person to submit alternative proposals or bids for any proposed conveyance, lease, mortgage or other disposition of land within the proposed economic development project area;

(E) A description of the economic development plan or economic development project if a plan or project is a subject matter of the hearing; and

(F) Such other matters as the municipality may deem appropriate.

(3) Not less than 30 days prior to the date set for hearing, the municipality shall give notice by mail as provided in this subsection (b) to all taxing districts, of which taxable property is included in the economic development project area, and to the Department. In addition to the other requirements under this subsection (b), the notice shall include an invitation to the Department and each taxing district to submit comments to the municipality concerning the subject matter of the hearing prior to the date of hearing. No economic development area may be established or extended without the written approval of the taxing districts comprising a majority of the total amount of taxes extended within the economic development area in the previous taxable year. No direct or indirect rights or privileges conveyed to any corporation under an economic development plan or agreement may be transferred to a developer's successor entity without the express, written approval of each taxing district located within the economic development area.

(c) At the public hearing any interested person, the Department or any affected taxing district may file written objections with the municipal clerk and may be heard orally with respect to any issues embodied in the notice. The municipality shall hear and determine all alternate proposals or bids for any proposed conveyance, lease, mortgage or other disposition of land and all protests and objections at the hearing, and the hearing may be adjourned to another date without further notice other than a motion to be entered upon the minutes fixing the time and place of the adjourned hearing. Public hearings with regard to an economic development plan, economic development project area, or economic development project may be held simultaneously.

(d) At the public hearing or at any time prior to the adoption by the municipality of an ordinance approving an economic development plan, the municipality may make changes in the economic development plan. Changes which (1) alter the exterior boundaries of the proposed economic development project area, (2) substantially affect the general land uses established in the proposed economic development plan, (3) substantially change the nature of the proposed economic development project, (4) change the general description of any proposed developer, user or tenant of any property to be located or improved within the economic development project area, or (5) change the description of the type, class and number of employees to be employed in the operation of the facilities to be developed or improved within the economic development project area shall be made only after notice and hearing pursuant to the procedures set forth in this Section. Changes which do not (1) alter the exterior boundaries of a proposed economic development project area, (2) substantially affect the general land uses established in the proposed economic development plan, (3) substantially change the nature of the proposed economic development project, (4) change the general description of any proposed developer, user or tenant of any property to be located or improved within the economic development project area, or (5) change the description of the type, class and number of employees to be employed in the operation of the facilities to be developed or improved within the economic development project area may be made without further hearing, provided that the municipality shall give notice of its changes by mail to the Department and to each affected taxing district and by publication in a newspaper or newspapers of general circulation within the affected taxing districts. Such notice by mail and by publication shall each occur not later than 10 days following the adoption by ordinance of such changes.

(e) At any time within 30 days of the final adjournment of the public hearing, a municipality may, by ordinance, approve the economic development plan, establish the economic development project area, and authorize tax increment allocation financing for such economic development project area. Any ordinance adopted which approves an economic development plan shall contain findings that the economic development project shall create or retain not less than 2,000 full-time equivalent jobs, that private investment in an amount not less than $100,000,000 shall occur in the economic development project area, that the economic development project will encourage the increase of commerce and industry within the State, thereby reducing the evils attendant upon unemployment and increasing opportunities for personal income, and that the economic development project will increase or maintain the property, sales and income tax bases of the municipality and of the State. Any ordinance adopted which establishes an economic development project area shall contain the boundaries of such area by legal description and, where possible, by street location. Any ordinance adopted which authorizes tax increment allocation financing shall provide that the ad valorem taxes, if any, arising from the levies upon taxable real property in such economic development project area by taxing districts and tax rates determined in the manner provided in subsection (b) of Section 6 of this Act each year after the effective date of the ordinance until economic development project costs and all municipal obligations financing economic development project costs incurred under this Act have been paid shall be divided as follows:

(1) That portion of taxes levied upon each taxable lot, block, tract or parcel of real property which is attributable to the lower of the current equalized assessed value or the initial equalized assessed value of each such taxable lot, block, tract or parcel of real property in the economic development project area shall be allocated to and when collected shall be paid by the county collector to the respective affected taxing districts in the manner required by law in the absence of the adoption of tax increment allocation financing.

(2) That portion, if any, of such taxes which is attributable to the increase in the current equalized assessed valuation of each taxable lot, block, tract or parcel of real property in the economic development project area over and above the initial equalized assessed value of each property in the economic development project area shall be allocated to and when collected shall be paid to the municipal treasurer who shall deposit such taxes into a special fund called the special tax allocation fund of the municipality for the purpose of paying economic development project costs and obligations incurred in the payment thereof.

(3) Notwithstanding any other provision of law, the portion of the taxes extended by a school district located in an economic development project area may not be paid into the special tax allocation fund without the express written permission of the school district. If the school district does not give its express written permission, then the portion of taxes levied upon each taxable lot, block, tract or parcel of real property which is attributable to the school district shall be allocated to and when collected shall be paid by the county collector to the respective affected taxing districts in the manner required by law in the absence of the adoption of tax increment allocation financing.

(f) After a municipality has by ordinance approved an economic development plan and established an economic development project area, the plan may be amended and the boundaries of the area may be altered only as herein provided. Amendments which (1) alter the exterior boundaries of an economic development project area, (2) substantially affect the general land uses established pursuant to the economic development plan, (3) substantially change the nature of the economic development project, (4) change the general description of any proposed developer, user, or tenant of any property to be located or improved within the economic development project area, or (5) change the description of the type, class and number of employees to be employed in the operation of the facilities to be developed or improved within the economic development project area, shall be made only after notice and hearing pursuant to the procedures set forth in this Section. Amendments which do not (1) alter the boundaries of the economic development project area, (2) substantially affect the general land uses established in the economic development plan, (3) substantially change the nature of the economic development project, (4) change the general description of any proposed developer, user, or tenant of any property to be located or improved within the economic development project area, or (5) change the description of the type, class and number of employees to be employed in the operation of the facilities to be developed or improved within the economic development project area may be made without further hearing, provided that the municipality shall give notice of any amendment by mail to the Department and to each taxing district and by publication in a newspaper or newspapers of general circulation within the affected taxing districts. Such notice by mail and by publication shall each occur not later than 10 days following the adoption by ordinance of any amendments.

(Source: P.A. 86-38.)

(Text of Section after amendment by P.A. 97-636)

Sec. 4. Establishment of economic development project areas; ordinance; notice; hearing; changes in economic development plan. Economic development project areas shall be established as follows:

(a) The corporate authorities of a municipality shall by ordinance propose the establishment of an economic development project area and fix a time and place for a public hearing, and shall submit a certified copy of the ordinance as adopted to the Department.

(b)(1) Notice of the public hearing shall be given by publication and mailing. Notice by publication shall be given by publication at least twice, the first publication to be not more than 30 nor less than 10 days prior to the hearing in a newspaper of general circulation within the taxing districts having property in the proposed economic development project area. Notice by mailing shall be given by depositing such notice together with a copy of the proposed economic development plan in the United States mails by certified mail addressed to the person or persons in whose name the general taxes for the last preceding year were paid on each lot, block, tract, or parcel of land lying within the economic development project area. The notice shall be mailed not less than 10 days prior to the date set for the public hearing. In the event taxes for the last preceding year were not paid, the notice shall also be sent to the persons last listed on the tax rolls within the preceding 3 years as the owners of such property.

(2) The notices issued pursuant to this Section shall include the following:

(A) The time and place of public hearing;

(B) The boundaries of the proposed economic development project area by legal description and by street location where possible;

(C) A notification that all interested persons will be given an opportunity to be heard at the public hearing;

(D) An invitation for any person to submit alternative proposals or bids for any proposed conveyance, lease, mortgage or other disposition of land within the proposed economic development project area;

(E) A description of the economic development plan or economic development project if a plan or project is a subject matter of the hearing; and

(F) Such other matters as the municipality may deem appropriate.

(3) Not less than 30 days prior to the date set for hearing, the municipality shall give notice by mail as provided in this subsection (b) to all taxing districts, of which taxable property is included in the economic development project area, and to the Department. In addition to the other requirements under this subsection (b), the notice shall include an invitation to the Department and each taxing district to submit comments to the municipality concerning the subject matter of the hearing prior to the date of hearing. No economic development area may be established or extended without the written approval of the taxing districts comprising a majority of the total amount of taxes extended within the economic development area in the previous taxable year. No direct or indirect rights or privileges conveyed to any corporation under an economic development plan or agreement may be transferred to a developer's successor entity without the express, written approval of each taxing district located within the economic development area.

(c) At the public hearing any interested person, the Department or any affected taxing district may file written objections with the municipal clerk and may be heard orally with respect to any issues embodied in the notice. The municipality shall hear and determine all alternate proposals or bids for any proposed conveyance, lease, mortgage or other disposition of land and all protests and objections at the hearing, and the hearing may be adjourned to another date without further notice other than a motion to be entered upon the minutes fixing the time and place of the adjourned hearing. Public hearings with regard to an economic development plan, economic development project area, or economic development project may be held simultaneously.

(d) At the public hearing or at any time prior to the adoption by the municipality of an ordinance approving an economic development plan, the municipality may make changes in the economic development plan. Changes which (1) alter the exterior boundaries of the proposed economic development project area, (2) substantially affect the general land uses established in the proposed economic development plan, (3) substantially change the nature of the proposed economic development project, (4) change the general description of any proposed developer, user or tenant of any property to be located or improved within the economic development project area, or (5) change the description of the type, class and number of employees to be employed in the operation of the facilities to be developed or improved within the economic development project area shall be made only after notice and hearing pursuant to the procedures set forth in this Section. Changes which do not (1) alter the exterior boundaries of a proposed economic development project area, (2) substantially affect the general land uses established in the proposed economic development plan, (3) substantially change the nature of the proposed economic development project, (4) change the general description of any proposed developer, user or tenant of any property to be located or improved within the economic development project area, or (5) change the description of the type, class and number of employees to be employed in the operation of the facilities to be developed or improved within the economic development project area may be made without further hearing, provided that the municipality shall give notice of its changes by mail to the Department and to each affected taxing district and by publication in a newspaper or newspapers of general circulation within the affected taxing districts. Such notice by mail and by publication shall each occur not later than 10 days following the adoption by ordinance of such changes.

(e) At any time within 30 days of the final adjournment of the public hearing, a municipality may, by ordinance, approve the economic development plan, establish the economic development project area, and authorize tax increment allocation financing for such economic development project area. Any ordinance adopted which approves an economic development plan shall contain findings that the developer or any of its successor entities and its subsidiaries shall create or retain not less than 4,250 full-time equivalent jobs, that private investment in an amount not less than $100,000,000 shall occur in the economic development project area, that the economic development project will encourage the increase of commerce and industry within the State, thereby reducing the evils attendant upon unemployment and increasing opportunities for personal income, and that the economic development project will increase or maintain the property, sales and income tax bases of the municipality and of the State. Any ordinance adopted which establishes an economic development project area shall contain the boundaries of such area by legal description and, where possible, by street location. Any ordinance adopted which authorizes tax increment allocation financing shall provide that the ad valorem taxes, if any, arising from the levies upon taxable real property in such economic development project area by taxing districts and tax rates determined in the manner provided in subsection (b) of Section 6 of this Act each year after the effective date of the ordinance until economic development project costs and all municipal obligations financing economic development project costs incurred under this Act have been paid shall be divided as follows:

(1) That portion of taxes levied upon each taxable lot, block, tract or parcel of real property which is attributable to the lower of the current equalized assessed value or the initial equalized assessed value of each such taxable lot, block, tract or parcel of real property in the economic development project area shall be allocated to and when collected shall be paid by the county collector to the respective affected taxing districts in the manner required by law in the absence of the adoption of tax increment allocation financing.

(2) That portion, if any, of such taxes which is attributable to the increase in the current equalized assessed valuation of each taxable lot, block, tract or parcel of real property in the economic development project area over and above the initial equalized assessed value of each property in the economic development project area shall be allocated to and when collected shall be paid to the municipal treasurer who shall deposit such taxes into a special fund called the special tax allocation fund of the municipality for the purpose of paying economic development project costs and obligations incurred in the payment thereof.

(3) Notwithstanding any other provision of law, the portion of the taxes extended by a school district located in an economic development project area may not be paid into the special tax allocation fund without the express written permission of the school district. If the school district does not give its express written permission, then the portion of taxes levied upon each taxable lot, block, tract or parcel of real property which is attributable to the school district shall be allocated to and when collected shall be paid by the county collector to the respective affected taxing districts in the manner required by law in the absence of the adoption of tax increment allocation financing.

(f) After a municipality has by ordinance approved an economic development plan and established an economic development project area, the plan may be amended and the boundaries of the area may be altered only as herein provided. Amendments which (1) alter the exterior boundaries of an economic development project area, (2) substantially affect the general land uses established pursuant to the economic development plan, (3) substantially change the nature of the economic development project, (4) change the general description of any proposed developer, user, or tenant of any property to be located or improved within the economic development project area, or (5) change the description of the type, class and number of employees to be employed in the operation of the facilities to be developed or improved within the economic development project area, shall be made only after notice and hearing pursuant to the procedures set forth in this Section. Amendments which do not (1) alter the boundaries of the economic development project area, (2) substantially affect the general land uses established in the economic development plan, (3) substantially change the nature of the economic development project, (4) change the general description of any proposed developer, user, or tenant of any property to be located or improved within the economic development project area, or (5) change the description of the type, class and number of employees to be employed in the operation of the facilities to be developed or improved within the economic development project area may be made without further hearing, provided that the municipality shall give notice of any amendment by mail to the Department and to each taxing district and by publication in a newspaper or newspapers of general circulation within the affected taxing districts. Such notice by mail and by publication shall each occur not later than 10 days following the adoption by ordinance of any amendments.

(g) Extension of economic development project area; allocations; payment of outstanding claims; changes in equalized assessed valuation.

(1) Notwithstanding anything to the contrary set forth in this Act, upon the effective date of this amendatory Act of the 97th General Assembly, the duration of any existing economic development plan created pursuant to this Act is extended to the duration permitted under this subsection, up to a maximum duration of 15 years.

(2) For the purposes of this Section, real estate taxes paid on property within the economic development project area during calendar year 2013 and remitted to the developer and the taxing districts in 2014 shall be the "base amount". Beginning with real estate taxes remitted in 2014, for any economic development plan extended by operation of item (1) of this subsection (g), until such time as all existing obligations, as that term is defined in item (5) of this subsection (g), have been satisfied, the allocation of the special tax allocation fund shall be as follows:

(A) All receipts up to the first $350,000 shall be maintained by the municipality in an escrow account to be used solely for (i) expenses relating to the reports required by Section 4.7 of this Act and (ii) legal expenses incurred in defense of any civil action brought against the municipality relating to the economic development agreement. The escrow account shall be within the scope of the annual audit provided in Section 4.7 of this Act. Each December 31 following a deposit into the escrow account, any unobligated balance in the escrow account shall be distributed to the taxing districts in the same manner and proportion as the most recent distribution by the county collector to the taxing districts in the economic development project area.

(B) After the allocation required pursuant to paragraph (A) of this item (2), the next $5,000,000 of the receipts shall be allocated to the municipality.

(C) After the allocations required pursuant to paragraphs (A) and (B) of this item (2), 55% of the remaining receipts shall be allocated to the developer.

(D) After the allocations required pursuant to parts (A) and (B) of this item (2), 45% of the remaining receipts shall be allocated to the taxing districts located within the economic development project area, excluding the municipality.

(3) For real estate taxes paid in 2012 and remitted to the developer and the taxing districts in 2013 and prior years, the allocation formula contained in any economic development plan in effect immediately prior to the effective date of this amendatory Act of the 97th General Assembly shall apply.

(4) Beginning with real estate taxes paid in 2014 and remitted to the developer and the taxing districts in 2015 and each year thereafter, if the taxes paid within the economic development project area change from the base amount, the allocation of the special tax allocation fund shall be as follows:

(A) If the amount of current year taxes paid is less than the base amount, then the administrative escrow account shall receive the first $350,000 of receipts, the municipality shall receive the next $5,000,000 of receipts, the developer shall receive 55% of receipts over $5,350,000, and the remaining 45% of receipts over $5,350,000 shall be distributed to the taxing districts (excluding the municipality) in the same manner and proportion as the most recent distribution by the county collector to those taxing districts in the economic development project area.

(B) If the amount of current year taxes paid is greater than the base amount, then 75% of the increase in real estate tax receipts shall be payable to the developer and the remaining 25% of the increase in real estate tax receipts shall be distributed to the taxing districts (including the municipality) pursuant to the formula in this subsection.

(5) After (i) all existing obligations and interest thereon have been satisfied, (ii) any excess moneys have been distributed pursuant to this subsection, and (iii) final closing of the books and records of the economic development project area has occurred, the municipality shall adopt an ordinance dissolving the special tax allocation fund for the economic development project area and terminating the designation of the economic development project area as an economic development project area. All excess moneys in the special tax allocation fund shall be distributed to the taxing districts in the same manner and proportion as the most recent distribution by the county collector to those taxing districts in the economic development project area. For the purpose of this subsection (g), "existing obligations" means (i) the obligations of the developer that existed before the base year, as certified by a sworn affidavit of the principal financial officer of the developer attesting that the amounts set forth are true and correct, (ii) obligations of the municipality relating to the payment of the obligations of the developer, and (iii) any amounts payable by taxing districts to the developer for property taxes determined to have been overpaid, to the extent that those amounts payable have been carried forward as an interest bearing note due to the developer. All obligations of the developer due and payable shall be processed and paid in the order received, with the oldest notes to be processed and paid first. Beginning January 1, 2012, all outstanding interest bearing notes shall bear interest at the rate of 4% until paid.

(h) Beginning on the effective date of this amendatory Act of the 97th General Assembly, the taxing districts shall meet annually 180 days after the close of the municipal fiscal year, or as soon as the economic development project audit for that fiscal year becomes available, to review the effectiveness and status of the economic development project area up to that date.

(Source: P.A. 97-636, eff. 6-1-12.)

(20 ILCS 620/7.5 new)

Sec. 7.5. Assets purchased by Administrator. Notwithstanding any other provision of law, assets purchased by the Administrator to further the development of the economic development area may not be transferred out of the economic development area or otherwise used by the Administrator for development activities or services that are not related to the economic development area. Economic development area funds may be used only for that portion of the asset that is used for the development of the economic development area.

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.