HB5166 104TH GENERAL ASSEMBLY

LRB104 19304 RTM 32750 b

104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
HB5166

Introduced 2/10/2026, by Rep. Lawrence "Larry" Walsh, Jr.

SYNOPSIS AS INTRODUCED:

New Act

Creates the Dissolution of Special Districts Act. Establishes a method for the dissolution of special districts. Provides that a special district may dissolve upon the affirmative majority vote of its own governing body and the affirmative majority vote of a receiving unit of local government. Provides that, on or before the date of dissolution, all real and personal property, and any other assets, together with all personnel, contractual obligations, and liabilities of the dissolving special district shall be transferred to the receiving unit of local government. Provides that, on the date of dissolution, the dissolving special district is dissolved. Provides that, on and after the date of dissolution, all rights and duties of the dissolving special district may be exercised by the receiving unit of local government. Provides that, before the date of dissolution, the receiving unit of local government shall submit a service continuation plan confirming that the receiving unit of local government has the resources to continue providing the services provided by the dissolving special district. Effective immediately.

A BILL FOR

AN ACT concerning local government.

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

Section 1. Short title. This Act may be cited as the Dissolution of Special Districts Act.

Section 5. Applicability. The method of dissolution of a unit of local government under this Act shall be in addition to any other method of dissolving a unit of local government provided by law or otherwise.

Section 10. Definitions. As used in this Act:

"Date of dissolution" means the date that a dissolving special district is dissolved.

"Dissolving special district" means the special district proposed to be dissolved under this Act.

"Governing body" includes, but is not limited to, the board of a special district, the corporate authorities of a municipality, township board of a township, and the county board of a county.

"Receiving unit of local government" means the unit of local government receiving the rights, duties, and liabilities of the special district proposed to be dissolved under this Act.

Section 15. Requirements for dissolution. A special district shall be dissolved upon the affirmative vote of:

(1) a majority of the governing body of the dissolving special district to dissolve the special district on a specified date of dissolution and transfer the special district's rights, duties, and liabilities to the receiving unit of local government on or before a specified date of dissolution; and

(2) a majority of the governing body of the receiving unit of local government to receive the rights, duties, and liabilities of the dissolving special district on or before a specified date of dissolution.

Section 20. Dissolution; transfer of rights and duties.

(a) On or before the date of dissolution, all real and personal property, and any other assets, together with all personnel, contractual obligations, and liabilities of the dissolving special district shall be transferred to the receiving unit of local government.

(b) On the date of dissolution, the dissolving special district is dissolved.

(c) On and after the date of dissolution, all rights and duties of the dissolving special district may be exercised by the receiving unit of local government.

Section 25. Service continuation plan. Before the date of dissolution, the receiving unit of local government shall submit a service continuation plan confirming that the receiving unit of local government has the resources to continue providing the services provided by the dissolving special district.

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