103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
HB4061

 

Introduced 5/2/2023, by Rep. Ryan Spain - Tony M. McCombie - Brad Stephens - Anthony DeLuca - John Egofske

 

SYNOPSIS AS INTRODUCED:
 
30 ILCS 115/2  from Ch. 85, par. 612
35 ILCS 5/901

    Amends the Illinois Income Tax Act. Increases the amount to be deposited into the Local Government Distributive Fund from the taxes imposed under the Act. Amends the State Revenue Sharing Act to provide that amounts paid into the Local Government Distributive Fund are appropriated on a continuing basis. Effective July 1, 2023.


LRB103 32180 HLH 61289 b

 

 

A BILL FOR

 

HB4061LRB103 32180 HLH 61289 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The State Revenue Sharing Act is amended by
5changing Section 2 as follows:
 
6    (30 ILCS 115/2)  (from Ch. 85, par. 612)
7    Sec. 2. Allocation and Disbursement.
8    (a) As soon as may be after the first day of each month,
9the Department of Revenue shall allocate among the several
10municipalities and counties of this State the amount available
11in the Local Government Distributive Fund and in the Income
12Tax Surcharge Local Government Distributive Fund, determined
13as provided in Sections 1 and 1a above. Except as provided in
14Sections 13 and 13.1 of this Act, the Department shall then
15certify such allocations to the State Comptroller, who shall
16pay over to the several municipalities and counties the
17respective amounts allocated to them. The amount of such Funds
18allocable to each such municipality and county shall be in
19proportion to the number of individual residents of such
20municipality or county to the total population of the State,
21determined in each case on the basis of the latest census of
22the State, municipality or county conducted by the Federal
23government and certified by the Secretary of State and for

 

 

HB4061- 2 -LRB103 32180 HLH 61289 b

1annexations to municipalities, the latest Federal, State or
2municipal census of the annexed area which has been certified
3by the Department of Revenue. Allocations to the City of
4Chicago under this Section are subject to Section 6 of the
5Hotel Operators' Occupation Tax Act. For the purpose of this
6Section, the number of individual residents of a county shall
7be reduced by the number of individuals residing therein in
8municipalities, but the number of individual residents of the
9State, county and municipality shall reflect the latest census
10of any of them. The amounts transferred into the Local
11Government Distributive Fund pursuant to Section 9 of the Use
12Tax Act, Section 9 of the Service Use Tax Act, Section 9 of the
13Service Occupation Tax Act, and Section 3 of the Retailers'
14Occupation Tax Act, each as now or hereafter amended, pursuant
15to the amendments of such Sections by Public Act 85-1135,
16shall be distributed as provided in said Sections.
17    (b) It is the intent of the General Assembly that
18allocations made under this Section shall be made in a fair and
19equitable manner. Accordingly, the clerk of any municipality
20to which territory has been annexed, or from which territory
21has been disconnected, shall notify the Department of Revenue
22in writing of that annexation or disconnection and shall (1)
23state the number of residents within the territory that was
24annexed or disconnected, based on the last census conducted by
25the federal, State, or municipal government and certified by
26the Illinois Secretary of State, and (2) furnish therewith a

 

 

HB4061- 3 -LRB103 32180 HLH 61289 b

1certified copy of the plat of annexation or, in the case of
2disconnection, the ordinance, final judgment, or resolution of
3disconnection together with an accurate depiction of the
4territory disconnected. The county in which the annexed or
5disconnected territory is located shall verify that the number
6of residents stated on the written notice that is to be sent to
7the Department of Revenue is true and accurate. The verified
8statement of the county shall accompany the written notice.
9However, if the county does not respond to the municipality's
10request for verification within 30 days, this verification
11requirement shall be waived. The written notice shall be
12provided to the Department of Revenue (1) within 30 days after
13the effective date of this amendatory Act of the 96th General
14Assembly for disconnections occurring after January 1, 2007
15and before the effective date of this amendatory Act of the
1696th General Assembly or (2) within 30 days after the
17annexation or disconnection for annexations or disconnections
18occurring on or after the effective date of this amendatory
19Act of the 96th General Assembly. For purposes of this
20Section, a disconnection or annexation through court order is
21deemed to be effective 30 days after the entry of a final
22judgment order, unless stayed pending appeal. Thereafter, the
23monthly allocation made to the municipality and to any other
24municipality or county affected by the annexation or
25disconnection shall be adjusted in accordance with this
26Section to reflect the change in residency of the residents of

 

 

HB4061- 4 -LRB103 32180 HLH 61289 b

1the territory that was annexed or disconnected. The adjustment
2shall be made no later than 30 days after the Department of
3Revenue's receipt of the written notice of annexation or
4disconnection described in this Section.
5    (c) All amounts paid into the Local Government
6Distributive Fund in accordance with this Section and
7allocated pursuant to this Act are appropriated on a
8continuing basis.
9(Source: P.A. 96-1040, eff. 7-14-10.)
 
10    Section 10. The Illinois Income Tax Act is amended by
11changing Section 901 as follows:
 
12    (35 ILCS 5/901)
13    Sec. 901. Collection authority.
14    (a) In general. The Department shall collect the taxes
15imposed by this Act. The Department shall collect certified
16past due child support amounts under Section 2505-650 of the
17Department of Revenue Law of the Civil Administrative Code of
18Illinois. Except as provided in subsections (b), (c), (e),
19(f), (g), and (h) of this Section, money collected pursuant to
20subsections (a) and (b) of Section 201 of this Act shall be
21paid into the General Revenue Fund in the State treasury;
22money collected pursuant to subsections (c) and (d) of Section
23201 of this Act shall be paid into the Personal Property Tax
24Replacement Fund, a special fund in the State Treasury; and

 

 

HB4061- 5 -LRB103 32180 HLH 61289 b

1money collected under Section 2505-650 of the Department of
2Revenue Law of the Civil Administrative Code of Illinois shall
3be paid into the Child Support Enforcement Trust Fund, a
4special fund outside the State Treasury, or to the State
5Disbursement Unit established under Section 10-26 of the
6Illinois Public Aid Code, as directed by the Department of
7Healthcare and Family Services.
8    (b) Local Government Distributive Fund.
9    Beginning August 1, 2017 and continuing through July 31,
102022, the Treasurer shall transfer each month from the General
11Revenue Fund to the Local Government Distributive Fund an
12amount equal to the sum of: (i) 6.06% (10% of the ratio of the
133% individual income tax rate prior to 2011 to the 4.95%
14individual income tax rate after July 1, 2017) of the net
15revenue realized from the tax imposed by subsections (a) and
16(b) of Section 201 of this Act upon individuals, trusts, and
17estates during the preceding month; (ii) 6.85% (10% of the
18ratio of the 4.8% corporate income tax rate prior to 2011 to
19the 7% corporate income tax rate after July 1, 2017) of the net
20revenue realized from the tax imposed by subsections (a) and
21(b) of Section 201 of this Act upon corporations during the
22preceding month; and (iii) beginning February 1, 2022, 6.06%
23of the net revenue realized from the tax imposed by subsection
24(p) of Section 201 of this Act upon electing pass-through
25entities.
26    Beginning August 1, 2022 and until June 30, 2023, the

 

 

HB4061- 6 -LRB103 32180 HLH 61289 b

1Treasurer shall transfer each month from the General Revenue
2Fund to the Local Government Distributive Fund an amount equal
3to the sum of: (i) 6.16% of the net revenue realized from the
4tax imposed by subsections (a) and (b) of Section 201 of this
5Act upon individuals, trusts, and estates during the preceding
6month; (ii) 6.85% of the net revenue realized from the tax
7imposed by subsections (a) and (b) of Section 201 of this Act
8upon corporations during the preceding month; and (iii) 6.16%
9of the net revenue realized from the tax imposed by subsection
10(p) of Section 201 of this Act upon electing pass-through
11entities.
12    Beginning July 1, 2023 and until June 30, 2024, the
13following amounts shall be deposited into the Local Government
14Distributive Fund as the revenue is realized from the
15specified taxes: (i) 7% of the net revenue realized from the
16tax imposed by subsections (a) and (b) of Section 201 of this
17Act upon individuals, trusts, and estates; (ii) 7% of the net
18revenue realized from the tax imposed by subsection (p) of
19Section 201 of this Act upon electing pass-through entities;
20and (iii) 7% of the net revenue realized from the tax imposed
21by subsections (a) and (b) of Section 201 of this Act upon
22corporations.
23    Beginning July 1, 2024 and until June 30, 2025, the
24following amounts shall be deposited into the Local Government
25Distributive Fund as the revenue is realized from the
26specified taxes: (i) 7.75% of the net revenue realized from

 

 

HB4061- 7 -LRB103 32180 HLH 61289 b

1the tax imposed by subsections (a) and (b) of Section 201 of
2this Act upon individuals, trusts, and estates; (ii) 7.75% of
3the net revenue realized from the tax imposed by subsection
4(p) of Section 201 of this Act upon electing pass-through
5entities; and (iii) 7.75% of the net revenue realized from the
6tax imposed by subsections (a) and (b) of Section 201 of this
7Act upon corporations.
8    Beginning July 1, 2025 and until June 30, 2026, the
9following amounts shall be deposited into the Local Government
10Distributive Fund as the revenue is realized from the
11specified taxes: (i) 8.5% of the net revenue realized from the
12tax imposed by subsections (a) and (b) of Section 201 of this
13Act upon individuals, trusts, and estates; (ii) 8.5% of the
14net revenue realized from the tax imposed by subsection (p) of
15Section 201 of this Act upon electing pass-through entities;
16and (iii) 8.5% of the net revenue realized from the tax imposed
17by subsections (a) and (b) of Section 201 of this Act upon
18corporations.
19    Beginning July 1, 2026 and until June 30, 2027, the
20following amounts shall be deposited into the Local Government
21Distributive Fund as the revenue is realized from the
22specified taxes: (i) 9.25% of the net revenue realized from
23the tax imposed by subsections (a) and (b) of Section 201 of
24this Act upon individuals, trusts, and estates; (ii) 9.25% of
25the net revenue realized from the tax imposed by subsection
26(p) of Section 201 of this Act upon electing pass-through

 

 

HB4061- 8 -LRB103 32180 HLH 61289 b

1entities; and (iii) 9.25% of the net revenue realized from the
2tax imposed by subsections (a) and (b) of Section 201 of this
3Act upon corporations.
4    Beginning July 1, 2027, the following amounts shall be
5deposited into the Local Government Distributive Fund as the
6revenue is realized from the specified taxes: (i) 10% of the
7net revenue realized from the tax imposed by subsections (a)
8and (b) of Section 201 of this Act upon individuals, trusts,
9and estates; (ii) 10% of the net revenue realized from the tax
10imposed by subsection (p) of Section 201 of this Act upon
11electing pass-through entities; and (iii) 10% of the net
12revenue realized from the tax imposed by subsections (a) and
13(b) of Section 201 of this Act upon corporations.
14    Net revenue realized for a month shall be defined as the
15revenue from the tax imposed by subsections (a) and (b) of
16Section 201 of this Act which is deposited in the General
17Revenue Fund, the Education Assistance Fund, the Income Tax
18Surcharge Local Government Distributive Fund, the Fund for the
19Advancement of Education, and the Commitment to Human Services
20Fund during the month minus the amount paid out of the General
21Revenue Fund in State warrants during that same month as
22refunds to taxpayers for overpayment of liability under the
23tax imposed by subsections (a) and (b) of Section 201 of this
24Act.
25    Notwithstanding any provision of law to the contrary,
26beginning on July 6, 2017 (the effective date of Public Act

 

 

HB4061- 9 -LRB103 32180 HLH 61289 b

1100-23), those amounts required under this subsection (b) to
2be transferred by the Treasurer into the Local Government
3Distributive Fund from the General Revenue Fund shall be
4directly deposited into the Local Government Distributive Fund
5as the revenue is realized from the tax imposed by subsections
6(a) and (b) of Section 201 of this Act.
7    (c) Deposits Into Income Tax Refund Fund.
8        (1) Beginning on January 1, 1989 and thereafter, the
9    Department shall deposit a percentage of the amounts
10    collected pursuant to subsections (a) and (b)(1), (2), and
11    (3) of Section 201 of this Act into a fund in the State
12    treasury known as the Income Tax Refund Fund. Beginning
13    with State fiscal year 1990 and for each fiscal year
14    thereafter, the percentage deposited into the Income Tax
15    Refund Fund during a fiscal year shall be the Annual
16    Percentage. For fiscal year 2011, the Annual Percentage
17    shall be 8.75%. For fiscal year 2012, the Annual
18    Percentage shall be 8.75%. For fiscal year 2013, the
19    Annual Percentage shall be 9.75%. For fiscal year 2014,
20    the Annual Percentage shall be 9.5%. For fiscal year 2015,
21    the Annual Percentage shall be 10%. For fiscal year 2018,
22    the Annual Percentage shall be 9.8%. For fiscal year 2019,
23    the Annual Percentage shall be 9.7%. For fiscal year 2020,
24    the Annual Percentage shall be 9.5%. For fiscal year 2021,
25    the Annual Percentage shall be 9%. For fiscal year 2022,
26    the Annual Percentage shall be 9.25%. For fiscal year

 

 

HB4061- 10 -LRB103 32180 HLH 61289 b

1    2023, the Annual Percentage shall be 9.25%. For all other
2    fiscal years, the Annual Percentage shall be calculated as
3    a fraction, the numerator of which shall be the amount of
4    refunds approved for payment by the Department during the
5    preceding fiscal year as a result of overpayment of tax
6    liability under subsections (a) and (b)(1), (2), and (3)
7    of Section 201 of this Act plus the amount of such refunds
8    remaining approved but unpaid at the end of the preceding
9    fiscal year, minus the amounts transferred into the Income
10    Tax Refund Fund from the Tobacco Settlement Recovery Fund,
11    and the denominator of which shall be the amounts which
12    will be collected pursuant to subsections (a) and (b)(1),
13    (2), and (3) of Section 201 of this Act during the
14    preceding fiscal year; except that in State fiscal year
15    2002, the Annual Percentage shall in no event exceed 7.6%.
16    The Director of Revenue shall certify the Annual
17    Percentage to the Comptroller on the last business day of
18    the fiscal year immediately preceding the fiscal year for
19    which it is to be effective.
20        (2) Beginning on January 1, 1989 and thereafter, the
21    Department shall deposit a percentage of the amounts
22    collected pursuant to subsections (a) and (b)(6), (7), and
23    (8), (c) and (d) of Section 201 of this Act into a fund in
24    the State treasury known as the Income Tax Refund Fund.
25    Beginning with State fiscal year 1990 and for each fiscal
26    year thereafter, the percentage deposited into the Income

 

 

HB4061- 11 -LRB103 32180 HLH 61289 b

1    Tax Refund Fund during a fiscal year shall be the Annual
2    Percentage. For fiscal year 2011, the Annual Percentage
3    shall be 17.5%. For fiscal year 2012, the Annual
4    Percentage shall be 17.5%. For fiscal year 2013, the
5    Annual Percentage shall be 14%. For fiscal year 2014, the
6    Annual Percentage shall be 13.4%. For fiscal year 2015,
7    the Annual Percentage shall be 14%. For fiscal year 2018,
8    the Annual Percentage shall be 17.5%. For fiscal year
9    2019, the Annual Percentage shall be 15.5%. For fiscal
10    year 2020, the Annual Percentage shall be 14.25%. For
11    fiscal year 2021, the Annual Percentage shall be 14%. For
12    fiscal year 2022, the Annual Percentage shall be 15%. For
13    fiscal year 2023, the Annual Percentage shall be 14.5%.
14    For all other fiscal years, the Annual Percentage shall be
15    calculated as a fraction, the numerator of which shall be
16    the amount of refunds approved for payment by the
17    Department during the preceding fiscal year as a result of
18    overpayment of tax liability under subsections (a) and
19    (b)(6), (7), and (8), (c) and (d) of Section 201 of this
20    Act plus the amount of such refunds remaining approved but
21    unpaid at the end of the preceding fiscal year, and the
22    denominator of which shall be the amounts which will be
23    collected pursuant to subsections (a) and (b)(6), (7), and
24    (8), (c) and (d) of Section 201 of this Act during the
25    preceding fiscal year; except that in State fiscal year
26    2002, the Annual Percentage shall in no event exceed 23%.

 

 

HB4061- 12 -LRB103 32180 HLH 61289 b

1    The Director of Revenue shall certify the Annual
2    Percentage to the Comptroller on the last business day of
3    the fiscal year immediately preceding the fiscal year for
4    which it is to be effective.
5        (3) The Comptroller shall order transferred and the
6    Treasurer shall transfer from the Tobacco Settlement
7    Recovery Fund to the Income Tax Refund Fund (i)
8    $35,000,000 in January, 2001, (ii) $35,000,000 in January,
9    2002, and (iii) $35,000,000 in January, 2003.
10    (d) Expenditures from Income Tax Refund Fund.
11        (1) Beginning January 1, 1989, money in the Income Tax
12    Refund Fund shall be expended exclusively for the purpose
13    of paying refunds resulting from overpayment of tax
14    liability under Section 201 of this Act and for making
15    transfers pursuant to this subsection (d), except that in
16    State fiscal years 2022 and 2023, moneys in the Income Tax
17    Refund Fund shall also be used to pay one-time rebate
18    payments as provided under Sections 208.5 and 212.1.
19        (2) The Director shall order payment of refunds
20    resulting from overpayment of tax liability under Section
21    201 of this Act from the Income Tax Refund Fund only to the
22    extent that amounts collected pursuant to Section 201 of
23    this Act and transfers pursuant to this subsection (d) and
24    item (3) of subsection (c) have been deposited and
25    retained in the Fund.
26        (3) As soon as possible after the end of each fiscal

 

 

HB4061- 13 -LRB103 32180 HLH 61289 b

1    year, the Director shall order transferred and the State
2    Treasurer and State Comptroller shall transfer from the
3    Income Tax Refund Fund to the Personal Property Tax
4    Replacement Fund an amount, certified by the Director to
5    the Comptroller, equal to the excess of the amount
6    collected pursuant to subsections (c) and (d) of Section
7    201 of this Act deposited into the Income Tax Refund Fund
8    during the fiscal year over the amount of refunds
9    resulting from overpayment of tax liability under
10    subsections (c) and (d) of Section 201 of this Act paid
11    from the Income Tax Refund Fund during the fiscal year.
12        (4) As soon as possible after the end of each fiscal
13    year, the Director shall order transferred and the State
14    Treasurer and State Comptroller shall transfer from the
15    Personal Property Tax Replacement Fund to the Income Tax
16    Refund Fund an amount, certified by the Director to the
17    Comptroller, equal to the excess of the amount of refunds
18    resulting from overpayment of tax liability under
19    subsections (c) and (d) of Section 201 of this Act paid
20    from the Income Tax Refund Fund during the fiscal year
21    over the amount collected pursuant to subsections (c) and
22    (d) of Section 201 of this Act deposited into the Income
23    Tax Refund Fund during the fiscal year.
24        (4.5) As soon as possible after the end of fiscal year
25    1999 and of each fiscal year thereafter, the Director
26    shall order transferred and the State Treasurer and State

 

 

HB4061- 14 -LRB103 32180 HLH 61289 b

1    Comptroller shall transfer from the Income Tax Refund Fund
2    to the General Revenue Fund any surplus remaining in the
3    Income Tax Refund Fund as of the end of such fiscal year;
4    excluding for fiscal years 2000, 2001, and 2002 amounts
5    attributable to transfers under item (3) of subsection (c)
6    less refunds resulting from the earned income tax credit,
7    and excluding for fiscal year 2022 amounts attributable to
8    transfers from the General Revenue Fund authorized by
9    Public Act 102-700 this amendatory Act of the 102nd
10    General Assembly.
11        (5) This Act shall constitute an irrevocable and
12    continuing appropriation from the Income Tax Refund Fund
13    for the purposes of (i) paying refunds upon the order of
14    the Director in accordance with the provisions of this
15    Section and (ii) paying one-time rebate payments under
16    Sections 208.5 and 212.1.
17    (e) Deposits into the Education Assistance Fund and the
18Income Tax Surcharge Local Government Distributive Fund. On
19July 1, 1991, and thereafter, of the amounts collected
20pursuant to subsections (a) and (b) of Section 201 of this Act,
21minus deposits into the Income Tax Refund Fund, the Department
22shall deposit 7.3% into the Education Assistance Fund in the
23State Treasury. Beginning July 1, 1991, and continuing through
24January 31, 1993, of the amounts collected pursuant to
25subsections (a) and (b) of Section 201 of the Illinois Income
26Tax Act, minus deposits into the Income Tax Refund Fund, the

 

 

HB4061- 15 -LRB103 32180 HLH 61289 b

1Department shall deposit 3.0% into the Income Tax Surcharge
2Local Government Distributive Fund in the State Treasury.
3Beginning February 1, 1993 and continuing through June 30,
41993, of the amounts collected pursuant to subsections (a) and
5(b) of Section 201 of the Illinois Income Tax Act, minus
6deposits into the Income Tax Refund Fund, the Department shall
7deposit 4.4% into the Income Tax Surcharge Local Government
8Distributive Fund in the State Treasury. Beginning July 1,
91993, and continuing through June 30, 1994, of the amounts
10collected under subsections (a) and (b) of Section 201 of this
11Act, minus deposits into the Income Tax Refund Fund, the
12Department shall deposit 1.475% into the Income Tax Surcharge
13Local Government Distributive Fund in the State Treasury.
14    (f) Deposits into the Fund for the Advancement of
15Education. Beginning February 1, 2015, the Department shall
16deposit the following portions of the revenue realized from
17the tax imposed upon individuals, trusts, and estates by
18subsections (a) and (b) of Section 201 of this Act, minus
19deposits into the Income Tax Refund Fund, into the Fund for the
20Advancement of Education:
21        (1) beginning February 1, 2015, and prior to February
22    1, 2025, 1/30; and
23        (2) beginning February 1, 2025, 1/26.
24    If the rate of tax imposed by subsection (a) and (b) of
25Section 201 is reduced pursuant to Section 201.5 of this Act,
26the Department shall not make the deposits required by this

 

 

HB4061- 16 -LRB103 32180 HLH 61289 b

1subsection (f) on or after the effective date of the
2reduction.
3    (g) Deposits into the Commitment to Human Services Fund.
4Beginning February 1, 2015, the Department shall deposit the
5following portions of the revenue realized from the tax
6imposed upon individuals, trusts, and estates by subsections
7(a) and (b) of Section 201 of this Act, minus deposits into the
8Income Tax Refund Fund, into the Commitment to Human Services
9Fund:
10        (1) beginning February 1, 2015, and prior to February
11    1, 2025, 1/30; and
12        (2) beginning February 1, 2025, 1/26.
13    If the rate of tax imposed by subsection (a) and (b) of
14Section 201 is reduced pursuant to Section 201.5 of this Act,
15the Department shall not make the deposits required by this
16subsection (g) on or after the effective date of the
17reduction.
18    (h) Deposits into the Tax Compliance and Administration
19Fund. Beginning on the first day of the first calendar month to
20occur on or after August 26, 2014 (the effective date of Public
21Act 98-1098), each month the Department shall pay into the Tax
22Compliance and Administration Fund, to be used, subject to
23appropriation, to fund additional auditors and compliance
24personnel at the Department, an amount equal to 1/12 of 5% of
25the cash receipts collected during the preceding fiscal year
26by the Audit Bureau of the Department from the tax imposed by

 

 

HB4061- 17 -LRB103 32180 HLH 61289 b

1subsections (a), (b), (c), and (d) of Section 201 of this Act,
2net of deposits into the Income Tax Refund Fund made from those
3cash receipts.
4(Source: P.A. 101-8, see Section 99 for effective date;
5101-10, eff. 6-5-19; 101-81, eff. 7-12-19; 101-636, eff.
66-10-20; 102-16, eff. 6-17-21; 102-558, eff. 8-20-21; 102-658,
7eff. 8-27-21; 102-699, eff. 4-19-22; 102-700, eff. 4-19-22;
8102-813, eff. 5-13-22; revised 8-2-22.)
 
9    Section 99. Effective date. This Act takes effect upon
10becoming law.