HB5500 104TH GENERAL ASSEMBLY

LRB104 19454 HLH 34246 b

104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
HB5500

Introduced 2/13/2026, by Rep. Jay Hoffman

SYNOPSIS AS INTRODUCED:

20 ILCS 655/5.4.1
50 ILCS 475/5-10
50 ILCS 475/5-30
50 ILCS 475/5-45
50 ILCS 475/5-50
50 ILCS 475/5-75

Amends the Illinois Enterprise Zone Act. Provides that, if a municipality has adopted an enterprise zone pursuant to the Act and subsequently establishes a redevelopment project area pursuant to the Tax Increment Allocation Redevelopment Act, the municipality may provide for a partial abatement of taxes for property located within both the enterprise zone and the redevelopment project area. Provides that, if a municipality has established a redevelopment project area pursuant to Tax Increment Allocation Redevelopment Act and subsequently adopts an enterprise zone that includes property within the redevelopment project area, the municipality may provide for a partial abatement of taxes for property located within both the enterprise zone and the redevelopment project area. Amends the Statewide Innovation Development and Economy Act. Provides that certain local hotel taxes are considered local taxes for purposes of the Act.

A BILL FOR

AN ACT concerning State government.

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

Section 5. The Illinois Enterprise Zone Act is amended by changing Section 5.4.1 as follows:

(20 ILCS 655/5.4.1)

Sec. 5.4.1. Adoption of Tax Increment Financing.

(a) If (i) a redevelopment project area is, will be, or has been created by a municipality under Division 74.4 of the Illinois Municipal Code, (ii) the redevelopment project area contains property that is located in an enterprise zone, (iii) the municipality adopts an amendment to the enterprise zone designating ordinance pursuant to Section 5.4 of this Act specifically concerning the abatement of taxes on property located within a redevelopment project area created pursuant to Division 74.4 of the Illinois Municipal Code, and (iv) the Department certifies the ordinance amendment, then the property that is located in both the enterprise zone and the redevelopment project area shall not be eligible for the abatement of taxes under Section 18-170 of the Property Tax Code.

No business enterprise or expansion or individual, however, that has constructed a new improvement or renovated or rehabilitated an existing improvement and has received an abatement on the improvement under Section 18-170 of the Property Tax Code shall be denied any benefit previously extended within the zone pursuant to this Act or pursuant to any other Illinois law providing benefits specifically to or within enterprise zones. Moreover, if the business enterprise or individual presents evidence to the municipality within 30 days after the adoption by the municipality of an amendment to the designating ordinance the sufficiency of which shall be determined by findings of the corporate authorities made within 30 days of the receipt of such evidence by the municipality, that before the date of the notice of the public hearing provided by the municipality regarding the amendment to the designating ordinance (i) the business enterprise or expansion or individual was committed to locate within the enterprise zone, (ii) substantial and binding financial obligations were made towards the development of the enterprise, and (iii) those commitments were made in reasonable reliance on the benefits and programs that were applicable to the enterprise or individual by reason of the enterprise zone, then the enterprise or expansion or individual shall not be denied any benefit previously extended within the zone pursuant to this Act or pursuant to any other Illinois law providing benefits specifically to or within enterprise zones.

(b) This Section applies to all property located within both a redevelopment project area adopted under Division 74.4 of the Illinois Municipal Code and an enterprise zone even if the redevelopment project area or the enterprise zone was adopted before the effective date of this amendatory Act of 1997.

(c) After July 1, 1997, if (i) a redevelopment project area is created by a municipality under Division 74.4 of the Illinois Municipal Code and (ii) the redevelopment project area contains property that is located in an enterprise zone, the municipality must adopt an amendment to the certified enterprise zone designating ordinance under Section 5.4 that property that is located in both the enterprise zone and the redevelopment project area shall not be eligible for any abatement of taxes under Section 18-170 of the Property Tax Code for new improvements or the renovation or rehabilitation of existing improvements, except as provided in subsection (e) and (f).

(d) In declaratory judgment actions under this Section, the Department and the designating municipality shall be necessary parties defendant.

(e) Notwithstanding any other provision of law, if a municipality has adopted an enterprise zone pursuant to this Act and subsequently establishes a redevelopment project area pursuant to the Tax Increment Allocation Redevelopment Act in the Illinois Municipal Code, the municipality may, by amendment to the certified enterprise zone designating ordinance, provide for a partial abatement of taxes under Section 18-170 of the Property Tax Code for property located within both the enterprise zone and the redevelopment project area. Any portion of property taxes not abated shall be subject to tax increment financing, and the terms of the applicable redevelopment project area agreement adopted pursuant to the Tax Increment Allocation Redevelopment Act.

(f) Notwithstanding any other provision of law, if a municipality has established a redevelopment project area pursuant to Tax Increment Allocation Redevelopment Act in the Illinois Municipal Code and subsequently adopts an enterprise zone that includes property within the redevelopment project area, the municipality may, subject to the redevelopment project area plan and agreement, provide for a partial abatement of taxes under Section 18-170 of the Property Tax Code for property located within both the enterprise zone and the redevelopment project area. No such abatement shall reduce or impair any tax increment revenues pledged to secure outstanding bonds, notes, or other obligations of the redevelopment project area. Any portion of property taxes not abated shall remain subject to tax increment financing and the terms of the applicable redevelopment project area agreement adopted pursuant to Division 74.4 of the Illinois Municipal Code.

(Source: P.A. 90-258, eff. 7-30-97.)

Section 10. The Statewide Innovation Development and Economy Act is amended by changing Sections 5-10, 5-30, 5-45, and 5-50, and 5-75 as follows:

(50 ILCS 475/5-10)

Sec. 5-10. Definitions. In this Act:

"Base year" means the calendar year immediately before the calendar year in which the Office of the Governor approves the first STAR bond project within the STAR bond district.

"Commence work" means the manifest commencement of actual operations on the development site, such as erecting a building, general on-site and off-site grading and utility installations, commencing design and construction documentation, ordering lead-time materials, excavating the ground to lay a foundation or a basement, or work of like description that a reasonable person would recognize as being done with the intention and purpose to continue work until the project is completed.

"Corporate authority" or "corporate authorities" means the county board of a county; the mayor and alderpersons or similar body when the reference is to cities; the president and trustees or similar body when the reference is to villages or incorporated towns; and the council when the reference is to municipalities under the commission form of government.

"De minimis amount" means an amount less than 15% of the land area within a STAR bond district.

"Department" means the Department of Commerce and Economic Opportunity.

"Developer" means any individual, corporation, trust, estate, partnership, limited liability partnership, limited liability company, or other entity. "Developer" does not include a not-for-profit entity, political subdivision, or other agency or instrumentality of the State.

"Development user" means an owner, operator, licensee, codeveloper, subdeveloper, or tenant that: (i) operates a business within a STAR bond district that is a retail store, hotel, or entertainment venue; (ii) does not have another Illinois location within a 30-mile radius at the time of opening; and (iii) makes an initial capital investment, including project costs and other direct costs, of not less than $30,000,000 for the business.

"Director" means the Director of Commerce and Economic Opportunity.

"Economic development region" means the counties encompassed within any one of the 10 economic development regions recognized by the Department on the effective date of this Act.

"Eligible area" means contiguous parcels of real property that meet all of the following: (i) the property is directly and substantially benefited by the proposed STAR bond district plan; (ii) at least 50% of the total land area of the real property is located within an underserved area, as defined by the Department at the time the STAR bond district plan is submitted; (iii) the property is located in an area with not less than 10,000 residents within a 5-mile radius of the proposed district; (iv) the property is located 15 miles or less from either a State highway or federal interstate highway; and (v) the area is found by the governing body of the political subdivision to meet the following requirements:

(1) the use, condition, and character of the buildings in the area, if any, are not consistent with the purposes set forth in Section 5-5;

(2) a STAR bond district within the area is expected to create or retain job opportunities within the political subdivision;

(3) a STAR bond district within the area will serve to further the development of adjacent areas;

(4) without the availability of STAR bonds, the projects described in the STAR bond district plan would not be feasible in the area;

(5) a STAR bond district will strengthen the commercial sector of the political subdivision;

(6) a STAR bond district will enhance the tax base of the political subdivision; and

(7) the formation of a STAR bond district is in the best interest of the political subdivision.

The findings described in paragraphs (1) through (7) are subject to the review process provided in subsections (e) and (f) of Section 5-20.

For the purposes of this definition, the area may be bisected by streets, highways, roads, alleys, railways, bike paths, streams, rivers, and other waterways and still be deemed contiguous.

"Entertainment venue" means a business that has a primary use of providing a venue for entertainment attractions, rides, or other activities oriented toward the entertainment and amusement of its patrons.

"Feasibility study" means the feasibility study described in subsection (b) of Section 5-30.

"Hotel" has the same meaning given to that term in Section 2 of the Hotel Operators' Occupation Tax Act.

"Infrastructure" means the public improvements and private improvements that serve the public purposes set forth in Section 5-5 of this Act and that benefit the STAR bond district or any STAR bond projects, including, but not limited to, streets, drives and driveways, traffic and directional signs and signals, parking lots and parking facilities, interchanges, highways, sidewalks, bridges, underpasses and overpasses, bike and walking trails, sanitary storm sewers and lift stations, drainage conduits, channels, levees, canals, storm water detention and retention facilities, utilities and utility connections, water mains and extensions, and street and parking lot lighting and connections.

"Local hotel tax" means any taxes received by a municipality, county, or other local government entity arising from transactions by all persons engaged in the business of renting, leasing, or letting rooms in a hotel, as defined in the Hotel Operators' Occupation Tax Act, within a STAR bond district, imposed pursuant to Section 8-3-14 of the Illinois Municipal Code or Section 5-1030 of the Counties Code.

"Local sales taxes" means any locally imposed taxes received by a municipality, county, or other local governmental entity arising from sales by retailers and servicemen within a STAR bond district. "Local sales taxes" includes business district sales taxes, taxes imposed under Section 5-50, and that portion of the net revenue allocated from the Local Government Tax Fund and the County and Mass Transit District Fund to the municipality, county, or other governmental entity under the Retailers' Occupation Tax Act, the Use Tax Act, the Service Use Tax Act, and the Service Occupation Tax Act from transactions at places of business located in a STAR bond district. "Local sales taxes" includes all the net revenue realized under any local hotel tax. "Local sales taxes" does not include (i) any taxes authorized under the Local Mass Transit District Act or the Metro-East Park and Recreation District Act for so long as the applicable taxing district does not impose a tax on real property, (ii) any county school facility and resources occupation taxes imposed under Section 5-1006.7 of the Counties Code, (iii) any taxes authorized under the Flood Prevention District Act, (iv) any taxes authorized under the Special County Occupation Tax For Public Safety, Public Facilities, Mental Health, Substance Abuse, or Transportation Law, (v) any taxes authorized under the Regional Transportation Authority Act, (vi) any taxes authorized under the County Motor Fuel Tax Law, or (vii) any taxes authorized under the Municipal Motor Fuel Tax Law, or (viii) any taxes committed to other uses by election of voters or pledged to any bond repayment, other than STAR bonds, prior to the approval of the STAR bond project.

"Local sales tax increment" means:

(1) with respect to local sales taxes administered by a municipality, county, or other unit of local government, that portion of the local sales tax that is in excess of the aggregate local sales tax in the district for the same month in the base year, as determined by the respective municipality, county, or other unit of local government; the Department of Revenue shall allocate the local sales tax increment only if the local sales tax is administered by the Department; and

(2) with respect to local sales taxes administered by the Department of Revenue:

(A) except with respect to the 0.25% county portion of the 6.25% State rate, all the local sales tax paid by taxpayers in the district that is in excess of the aggregate local sales tax paid by taxpayers in the district for the same month in the base year, as determined by the Department of Revenue; and

(B) with respect to the 0.25% county portion of the 6.25% State rate, in the case of a STAR bond district that is partially or wholly within a municipality, that portion of the 0.25% county portion of the 6.25% rate paid by taxpayers in the district for sales made within the corporate limits of the municipality that is in excess of the aggregate local sales tax paid by taxpayers in the district for sales made within the corporate limits of the municipality for the same month in the base year, as determined by the Department of Revenue, but only if the corporate authorities of the county adopt an ordinance, and file a copy of the ordinance with the Department of Revenue within the same time frames as required for STAR bond occupation taxes under Section 5-50, that designates the taxes as part of the local sales tax increment under this Act.

(3) with respect to any local hotel tax that is administered and collected directly by a municipality, that portion of the local hotel tax revenues that is in excess of the amount of such tax revenues generated within the STAR bond district that are in excess of the aggregate hotel tax revenues generated within the district for the same month in the base year, as determined by the political subdivision.

"Market study" means a study to determine the ability of the proposed STAR bond project to gain market share locally and regionally and to remain profitable after the term of repayment of STAR bonds.

"Master developer" means a developer cooperating with a political subdivision to plan, develop, and implement a STAR bond project plan for a STAR bond district. Subject to the limitations of Section 5-40, the master developer may work with and transfer certain development rights to other developers for the purpose of implementing STAR bond project plans and achieving the purposes of this Act. A master developer for a STAR bond district shall be appointed by a political subdivision in the resolution establishing the STAR bond district, and the master developer or its affiliate must, at the time of appointment, own or have control of, through purchase agreements, option contracts, or other means, not less than 50% of the acreage within the STAR bond district. "Master developer" also means any successor developer who has assumed the role and responsibilities of the original master developer through the execution of an amended master development agreement and has been approved as the master developer through resolution by the applicable political subdivision.

"Master development agreement" means an agreement between the master developer (or any approved successor developers) and the political subdivision to govern a STAR bond district and any STAR bond projects.

"Municipality" means the city, village, or incorporated town in which a proposed STAR bond district is located.

"New Opportunities for Vacation and Adventure District" or "NOVA district" means a STAR bond district that encompasses a minimum of 500 contiguous acres and, during the STAR bond district plan approval process, demonstrates a reasonable expectation of (1) producing a capital investment of at least $500,000,000, (2) generating not less than $300,000,000 in annual gross sales, (3) attracting at least 1,000,000 visitors annually, and (4) creating a minimum of 1,500 jobs.

"Pledged STAR revenues" means those sales tax revenues and other sources of funds that are pledged to pay debt service on STAR bonds or to pay project costs under Section 5-45. Notwithstanding any provision of law to the contrary, any State sales tax increment or local sales tax increment from a retail entity initiating operations in a STAR bond district while terminating operations at another Illinois location within 25 miles of the STAR bond district shall not constitute pledged STAR revenues or be available to pay principal and interest on STAR bonds. For purposes of this definition, "terminating operations" means a closing of a retail operation that is directly related to the opening of the same operation or like retail entity owned or operated by more than 50% of the original ownership in a STAR bond district within one year before or after initiating operations in the STAR bond district, but it does not mean closing an operation for reasons beyond the control of the retail entity, as documented by the retail entity, subject to a reasonable finding by the municipality (or county if such retail operation is not located within a municipality) in which the terminated operations were located that the closed location contained inadequate space, had become economically obsolete, or was no longer a viable location for the retailer or serviceperson.

"Political subdivision" means a municipality or county that undertakes to establish a STAR bond district under the provisions of this Act.

"Professional sports" means any of the following sports at the major league level: baseball, basketball, football, or ice hockey.

"Project costs" means the total of all costs incurred or estimated to be incurred on or after the date of establishment of a STAR bond district that are reasonable or necessary to implement a STAR bond district plan or any STAR bond project plans, or both, including costs incurred for public improvements and private improvements that serve the public purposes set forth in Section 5-5 of this Act. "Project costs" includes, without limitation:

(1) costs of studies, surveys, development of plans and specifications, formation, implementation, and administration of a STAR bond district, STAR bond district plan, any STAR bond projects, or any STAR bond project plans, including, but not limited to, staff and professional service costs for architectural, engineering, legal, financial, planning, or other services; however, no charges for professional services may be based on a percentage of the tax increment collected, and no contracts for professional services, excluding architectural and engineering services, may be entered into if the terms of the contract extend beyond a period of 3 years;

(2) property assembly costs, including, but not limited to, costs related to:

(A) the acquisition of land and other real property or rights or interests in the land or other real property located within the boundaries of a STAR bond district;

(B) the demolition of buildings, site preparation, and site improvements that serve as an engineered barrier addressing ground level or below ground environmental contamination, including, but not limited to, parking lots and other concrete or asphalt barriers; and

(C) the clearing and grading of land and the importing of additional soil and fill materials or the removal of soil and fill materials from the site;

(3) subject to paragraph (6), the costs of buildings and other vertical improvements that are located within the boundaries of a STAR bond district and are owned by a political subdivision or other public entity, including without limitation police and fire stations, educational facilities, and public restrooms and rest areas;

(4) costs of buildings and other vertical improvements that are located within: (i) the boundaries of a STAR bond district and are owned by a development user, except that only 4 development users, other than a hotel or entertainment venue, in a STAR bond district and one hotel are eligible to include the cost of those vertical improvements as project costs, or (ii) the boundaries of a NOVA district;

(5) costs of the following vertical improvements that are located within (i) the boundaries of a STAR bond district and owned by an entertainment venue, except that only one entertainment venue in a STAR bond district is eligible to include the cost of those vertical improvements as project costs, or (ii) a NOVA district:

(A) buildings;

(B) rides and attractions, including, but not limited to, carousels, slides, roller coasters, displays, models, towers, works of art, and similar theme and amusement park improvements; and

(C) other vertical improvements;

(6) costs of the design and construction of infrastructure and public works located within the boundaries of a STAR bond district that are reasonable or necessary to implement a STAR bond district plan or any STAR bond project plans, or both, except that "project costs" does not include the cost of constructing a new municipal public building principally used to provide offices, storage space, or conference facilities or vehicle storage, maintenance, or repair for administrative, public safety, or public works personnel and that is not intended to replace an existing public building unless the political subdivision makes a reasonable determination in a STAR bond district plan or any STAR bond project plans, supported by information that provides the basis for that determination, that the new municipal building is required to meet an increase in the need for public safety purposes anticipated to result from the implementation of the STAR bond district plan or any STAR bond project plans;

(7) costs of the design and construction of the following improvements located outside the boundaries of a STAR bond district if the costs are essential to further the purpose and development of a STAR bond district plan and either (i) part of and connected to sewer, water, or utility service lines that physically connect to the STAR bond district or (ii) significant improvements for adjacent off-site highways, streets, roadways, and interchanges that are approved by the Department of Transportation. No other cost of infrastructure and public works improvements located outside the boundaries of a STAR bond district may be deemed project costs;

(8) costs of job training and retraining projects for current and future employees of development users, including programs implemented by businesses located within a STAR bond district;

(9) financing costs, including, but not limited to, all necessary and incidental expenses related to the issuance of obligations and the payment of interest on any obligations issued under this Act, including interest accruing during the estimated period of construction of any improvements in a STAR bond district or any STAR bond projects for which such obligations are issued and for not exceeding 36 months thereafter and including reasonable reserves related thereto;

(10) interest costs incurred by a developer for project costs related to the acquisition, formation, implementation, development, construction, and administration of a STAR bond district, STAR bond district plan, STAR bond projects, or any STAR bond project plans if:

(A) payment of the costs in any one year may not exceed 30% of the annual interest costs incurred by the developer with regard to the STAR bond district or any STAR bond projects during that year; and

(B) the total of the interest payments paid under this Act may not exceed 30% of the total cost paid or incurred by the developer for a STAR bond district or STAR bond projects, plus project costs, excluding any property assembly costs incurred by a political subdivision under this Act;

(11) to the extent the political subdivision by written agreement accepts and approves the same, all or a portion of a taxing district's capital costs resulting from a STAR bond district or STAR bond projects necessarily incurred or to be incurred within a taxing district in furtherance of the objectives of a STAR bond district plan or STAR bond project plans;

(12) costs of common areas located within the boundaries of a STAR bond district;

(13) costs of landscaping and plantings, retaining walls and fences, artificial lakes and ponds, shelters, benches, lighting, and similar amenities located within the boundaries of a STAR bond district;

(14) costs of mounted building signs, site monuments, and pylon signs located within the boundaries of a STAR bond district; or

(15) if included in the STAR bond district plan and approved in writing by the Director, salaries or a portion of salaries for local government employees to the extent the same are directly attributable to the work of those employees on the establishment and management of a STAR bond district or any STAR bond project.

Except as specified in items (1) through (15) of this definition, "project costs" does not include:

(A) the cost of construction of buildings that are owned by a municipality or county and leased to a development user for uses other than as a retail store, hotel, or entertainment venue;

(B) moving expenses for employees of the businesses locating within the STAR bond district;

(C) property taxes for property located in the STAR bond district;

(D) lobbying costs; and

(E) general overhead or administrative costs of the political subdivision that would still have been incurred by the political subdivision if the political subdivision had not established a STAR bond district.

"Project development agreement" means any one or more agreements, including any amendments to that agreement or those agreements, between a master developer and any codeveloper or subdeveloper in connection with a STAR bond project, which project development agreement may include the political subdivision as a party.

"Project labor agreement" means a prehire collective bargaining agreement that covers all terms and conditions of employment between the general contractor and all subcontractors hired by the master developer, developer, codeveloper, or subdeveloper, as applicable, of a STAR bond project. A "project labor agreement" must include the following provisions: (1) a provision establishing the minimum hourly wage for each class of labor organization employee; (2) a provision establishing the benefits and other compensation for each class of labor organization employee; (3) a provision requiring that no strike or dispute will be engaged in by the labor organization employees; (4) a provision requiring that no lockout or dispute will be engaged in by the general contractor and all subcontractors building the project; and (5) a provision establishing goals for apprenticeship hours to be performed by minority persons and women and goals for total hours to be performed by minority persons and women, as those terms are defined in the Business Enterprise for Minorities, Women, and Persons with Disabilities Act. A "project labor agreement" may include other terms and conditions as necessary.

"Projected market area" means any area within the State in which a STAR bond district or STAR bond project is projected to have a significant fiscal or market impact as determined by the Director.

"Resolution" means a resolution, order, ordinance, or other appropriate form of legislative action of a political subdivision or other applicable public entity approved by a vote of a majority of a quorum at a meeting of the governing body of the political subdivision or applicable public entity.

"STAR bond" means a sales tax and revenue bond, note, or other obligation payable from pledged STAR revenues and issued by a political subdivision, the proceeds of which shall be used only to pay project costs as defined in this Act.

"STAR bond district" means the specific area that is declared to be an eligible area by the political subdivision, that has received approval by the State, and in which the political subdivision may develop one or more STAR bond projects.

"STAR bond district plan" means the preliminary or conceptual plan that generally identifies the proposed STAR bond project areas and identifies in a general manner the buildings, facilities, and improvements to be constructed or improved in each STAR bond project area.

"STAR bond project" means a project that is located within a STAR bond district and that is approved under Section 5-30.

"STAR bond project area" means the geographic area within a STAR bond district in which there may be one or more STAR bond projects.

"STAR bond project plan" means the written plan adopted by a political subdivision for the development of a STAR bond project in a STAR bond district; the plan may include, but is not limited to, (i) project costs incurred prior to the date of the STAR bond project plan and estimated future STAR bond project costs, (ii) proposed sources of funds to pay those costs, (iii) the nature and estimated term of any obligations to be issued by the political subdivision to pay those costs, (iv) the most recent equalized assessed valuation of the STAR bond project area, (v) an estimate of the equalized assessed valuation of the STAR bond district or applicable project area after completion of a STAR bond project, (vi) a general description of the types of any known or proposed developers, users, or tenants of the STAR bond project or projects included in the plan, (vii) a general description of the type, structure, and character of the property or facilities to be developed or improved, (viii) a description of the general land uses to apply to the STAR bond project, and (ix) a general description or an estimate of the type, class, and number of employees to be employed in the operation of the STAR bond project.

"State sales tax" means all the net revenue realized under the Retailers' Occupation Tax Act, the Use Tax Act, the Service Use Tax Act, the Hotel Operators' Occupation Tax Act, and the Service Occupation Tax Act from transactions at places of business located within a STAR bond district, excluding that portion of the net revenue realized under the Retailers' Occupation Tax Act, the Use Tax Act, the Service Use Tax Act, and the Service Occupation Tax Act from transactions at places of business located within a STAR bond district that is deposited into the Local Government Tax Fund and the County and Mass Transit District Fund.

"State sales tax increment" means:

(1) with respect to all STAR bond districts that do not qualify as NOVA districts:

(A) 100% of that portion of the aggregate State sales tax that is in excess of the aggregate State sales tax for the same month in the base year, as determined by the Department of Revenue, from transactions at up to 4 development users located within a STAR bond district, which development users shall be designated by the master developer and approved by the political subdivision and the Director of Revenue in conjunction with the applicable STAR bond project approval; and

(B) 25% of that portion of the aggregate State sales tax that is in excess of the aggregate State sales tax for the same month in the base year, as determined by the Department of Revenue from all other transactions within a STAR bond district; and

(2) with respect to all NOVA districts:

(A) 100% of that portion of the State sales tax that is in excess of the State sales tax for the same month in the base year, as determined by the Department of Revenue, from transactions at up to 4 development users located, which development users shall be designated by the master developer and approved by the political subdivision and the Director of Revenue in conjunction with the applicable STAR bond project approval; and

(B) 50% of that portion of the State sales tax that is in excess of the State sales tax for the same month in the base year from all other transactions within the NOVA district.

"Substantial change" means a change in which the proposed STAR bond project plan differs substantially in size, scope, or use from the approved STAR bond district plan or STAR bond project plan.

"Taxpayer" means an individual, partnership, corporation, limited liability company, trust, estate, or other entity that is subject to the Illinois Income Tax Act.

"Total development costs" means the aggregate public and private investment in a STAR bond district, including project costs and other direct and indirect costs related to the development of the STAR bond district.

"Underserved area" has the meaning given to that term in Section 5-5 of the Economic Development for a Growing Economy Tax Credit Act.

"Vacant" means that portion of the land in a proposed STAR bond district that is not occupied by a building, facility, or other vertical improvement.

(Source: P.A. 104-453, eff. 12-12-25.)

(50 ILCS 475/5-30)

Sec. 5-30. Approval of STAR bond projects.

(a) The corporate authorities of a political subdivision seeking to establish a STAR bond project in an approved STAR bond district must submit a proposed STAR bond project plan to the Department, the Department of Revenue, and the Governor's Office of Management and Budget on or before June 1, 2028. A STAR bond project which is partially outside the boundaries of a municipality must also be approved by the corporate authorities of the county by resolution.

After the establishment of a STAR bond district, the master developer may propose a STAR bond project to a political subdivision, and the master developer shall, in cooperation with the political subdivision, prepare a STAR bond project plan in consultation with the planning commission of the political subdivision, if any. The STAR bond project plan may be implemented in separate development stages.

(b) Any political subdivision considering a STAR bond project within a STAR bond district shall cause to be prepared an independent feasibility study. The feasibility study shall be prepared by a feasibility consultant approved by the Department. The feasibility consultant shall provide certified copies of the feasibility study to the political subdivision, the Department, the Department of Revenue, and the Governor's Office of Management and Budget. The feasibility study shall include the following:

(1) the estimated amount of pledged STAR revenues expected to be collected in each year through the maturity date of the proposed STAR bonds;

(2) a statement of how the jobs and taxes obtained from the STAR bond project will contribute significantly to the economic development of the State and region;

(3) visitation expectations;

(4) the unique quality of the project;

(5) an economic impact study;

(6) a market study;

(7) current and anticipated infrastructure analysis;

(8) integration and collaboration with other resources or businesses;

(9) the quality of service and experience provided, as measured against national consumer standards for the specific target market;

(10) project accountability, measured according to best industry practices;

(11) the expected return on State and local investment that the STAR bond project is anticipated to produce; and

(12) an anticipated principal and interest payment schedule on the STAR bonds.

The feasibility consultant, along with any other consultants commissioned to perform the studies and other analysis required by the feasibility study, shall be selected by the political subdivision but approved by the Department. The consultants shall be retained by the political subdivision. The political subdivision may seek reimbursement from the master developer.

The failure to include all information enumerated in this subsection in the feasibility study for a STAR bond project shall not affect the validity of STAR bonds issued under this Act.

(c) If the political subdivision determines the STAR bond project is feasible, the STAR bond project plan shall include:

(1) a summary of the feasibility study;

(2) a reference to the STAR bond district plan that identifies the STAR bond project area that is set forth in the STAR bond project plan that is being considered;

(3) a legal description and map of the STAR bond project area to be developed or redeveloped;

(4) a description of the buildings and facilities proposed to be constructed or improved in the STAR bond project area, including development users, as applicable;

(5) a copy of letters of intent to locate within the STAR bond district signed by both the master developer and the appropriate corporate officer of at least one development user for the STAR bond project proposed within the district;

(6) a copy of a project labor agreement entered into by the master developer and a commitment by the master developer, other developers, contractors, and subcontractors to comply with the requirements of Section 30-22 of the Illinois Procurement Code as they apply to responsible bidders; and

(7) any other information the corporate authorities of the political subdivision deems reasonable and necessary to advise the public of the intent of the STAR bond project plan.

(d) Before a political subdivision may hold a public hearing to consider a STAR bond project plan, the political subdivision must apply to the Department, the Department of Revenue, and the Governor's Office of Management and Budget for joint review and recommendation and ultimate approval or denial by the Office of the Governor of the STAR bond project plan. The corporate authorities of a political subdivision seeking to establish a STAR bond project in an approved STAR bond district must submit a proposed STAR bond project plan to the Department, the Department of Revenue, and the Governor's Office of Management and Budget by June 1, 2028 for consideration.

An application for approval of a STAR bond project plan must not be approved by the State unless all the components of the feasibility study set forth in paragraphs (1) through (12) of subsection (b) have been completed and submitted for review and recommendation for approval or denial. In addition to reviewing all the other elements of the STAR bond project plan required under subsection (c), which must be included in the application and include a letter of intent as required under paragraph (5) of subsection (c) in order to receive State approval, the Department, the Department of Revenue, and the Governor's Office of Management and Budget must review the feasibility study and consider all the components of the feasibility study set forth in paragraphs (1) through (12) of subsection (b), including, without limitation, the economic impact study and the financial benefit of the proposed STAR bond project to the local, regional, and State economies, the proposed adverse impacts on similar businesses and projects as well as municipalities within the market area, and the net effect of the proposed STAR bond project on the local, regional, and State economies. In addition to the economic impact study, the political subdivision must also submit to the agencies, as part of its application, the financial and other information that substantiates the basis for the conclusion of the economic impact study, in the form and manner as required by the agencies, so that the agencies can verify the results of the study. In addition to any other criteria in this subsection, the State may not approve the STAR bond project plan unless the agencies are satisfied that the proposed development users are, in fact, true development users and find that the STAR bond project plan is in accordance with the purpose of this Act and the public interest. As part of the review, the agencies shall evaluate the conclusions of the feasibility study as it relates to the projected State and local sales tax increments expected to be generated in the STAR bond district. The Department, the Department of Revenue, and the Governor's Office of Management and Budget shall jointly recommend the approval of a STAR bond project plan. In making the recommendation, the agencies shall consider the proximity of a proposed STAR bond project to another proposed or existing STAR bond project. Notwithstanding any other provision of this Act, the Department, the Department of Revenue, and the Governor's Office of Management and Budget shall not approve any STAR bond project plan that includes as part of the plan the development of any facility, stadium, arena, or other structure if: (1) the purpose of the facility, stadium, arena, or other structure is the holding of professional sports contests; or (2) the facility, stadium, arena, or other structure is within a one-mile radius of any structure that is developed on or after the effective date of this Act and has as one of its purposes the holding of professional sports contests. The agencies shall send a copy of their written findings and recommended approval or denial of the STAR bond project plan to the Office of the Governor for final action. Upon receipt of the Director's written findings and recommendation, the Office of the Governor shall issue a final approval or denial of the STAR bond project plan based on the criteria in this subsection and Section 5-15 and send a written approval or denial to the requesting political subdivision. Notwithstanding any other provision of law, for STAR bond districts designated as NOVA districts, the Office of the Governor shall issue a final approval or denial of the STAR bond project plan based on the criteria in this subsection and Section 5-15 and send written approval or denial to the requesting political subdivision within 180 days after the political subdivision applies for approval, as set out in this subsection (d). In granting its approval, the Office of the Governor may require the political subdivision to execute a binding agreement or memorandum of understanding with the State. The terms of the agreement or memorandum may include, among other things, the political subdivision's repayment of the State sales tax increment distributed to it if any violation of the agreement or memorandum or this Act occurs.

(e) Upon a finding by the planning and zoning commission of the political subdivision, if any, that the STAR bond project plan is consistent with the intent of the comprehensive plan for the development of the political subdivision and upon issuance of written approval of the STAR bond project plan from the Office of the Governor under subsection (d) of this Section, the corporate authorities of the political subdivision shall adopt a resolution stating that the political subdivision is considering the adoption of the STAR bond project plan. The resolution shall:

(1) give notice that a public hearing will be held to consider the adoption of the STAR bond project plan and fix the date, hour, and place of the public hearing;

(2) describe the general boundaries of the STAR bond district within which the STAR bond project will be located and the date of establishment of the STAR bond district;

(3) describe the general boundaries of the area proposed to be included within the STAR bond project area;

(4) provide that the STAR bond project plan and map of the area to be redeveloped or developed are available for inspection during regular office hours in the offices of the political subdivision; and

(5) contain a summary of the terms and conditions of any proposed project development agreement with the political subdivision.

(f) A public hearing shall be conducted to consider the adoption of any STAR bond project plan.

(1) The date fixed for the public hearing to consider the adoption of the STAR bond project plan shall be not less than 20 nor more than 90 days following the date of the adoption of the resolution fixing the date of the hearing.

(2) A copy of the political subdivision's resolution providing for the public hearing shall be sent by certified mail, return receipt requested, to the corporate authorities of the county. A copy of the political subdivision's resolution providing for the public hearing shall be sent by certified mail, return receipt requested, to each person or persons in whose name the general taxes for the last preceding year were paid on each parcel of land lying within the proposed STAR bond project area within 10 days following the date of the adoption of the resolution. The resolution shall be published once in a newspaper of general circulation in the political subdivision not less than one week nor more than 3 weeks before the date fixed for the public hearing. A map or aerial photo clearly delineating the area of land proposed to be included within the STAR bond project area shall be published with the resolution.

(3) The hearing shall be held at a location that is within 20 miles of the STAR bond district in a facility that can accommodate a large crowd is accessible to persons with disabilities.

(4) At the public hearing, a representative of the political subdivision or master developer shall present the STAR bond project plan. Following the presentation of the STAR bond project plan, all interested persons shall be given an opportunity to be heard. The corporate authorities may continue the date and time of the public hearing.

(g) Upon conclusion of the public hearing, the governing body of the political subdivision may adopt the STAR bond project plan by a resolution approving the STAR bond project plan.

(h) After the adoption by the corporate authorities of the political subdivision of a STAR bond project plan, the political subdivision may enter into a project development agreement if the master developer has requested the political subdivision to be a party to the project development agreement under subsection (b) of Section 5-40.

(i) Within 30 days after the adoption by the political subdivision of a STAR bond project plan, the clerk of the political subdivision shall transmit a copy of the legal description of the land and a list of all new and existing mailing addresses within the STAR bond district, a copy of the resolution adopting the STAR bond project plan, and a map or plat indicating the boundaries of the STAR bond project area and STAR bond district to the clerk, treasurer, and governing body of the county and to the Department and Department of Revenue. Within 30 days of creation of any new mailing address within a STAR bond district, the clerk of the political subdivision shall provide written notice of that new address to the Department and the Department of Revenue.

If a certified copy of the resolution adopting the STAR bond project plan is filed with the Department of Revenue on or before the first day of April, the Department of Revenue, if all other requirements of this subsection are met, shall proceed to collect and allocate any local sales tax increment and any State sales tax increment in accordance with the provisions of this Act on the first day of July next following the adoption and filing. If a certified copy of the resolution adopting the STAR bond project plan is filed with the Department of Revenue after April 1 but on or before the first day of October, the Department of Revenue, if all other requirements of this subsection are met, shall proceed to collect and allocate any local sales tax increment and any State sales tax increment in accordance with the provisions of this Act as of the first day of January next following the adoption and filing. Notwithstanding the foregoing, any local sales tax increment derived from local hotel taxes and visitor investment surcharges that are designated as pledged STAR revenues pursuant to this Act shall be calculated, collected, and administered by the political subdivision imposing such tax, and shall not be subject to collection or allocation by the Department of Revenue.

Any substantial changes to a STAR bond project plan as adopted shall be subject to a public hearing following publication of notice thereof in a newspaper of general circulation in the political subdivision and approval by resolution of the governing body of the political subdivision.

The Department of Revenue shall not collect or allocate any local sales tax increment or State sales tax increment until the political subdivision also provides, in the manner prescribed by the Department of Revenue, the boundaries of the STAR bond district and each address in the STAR bond district in such a way that the Department of Revenue can determine by its address whether a business is located in the STAR bond district. The political subdivision must provide this boundary and address information to the Department of Revenue, with a copy to the Department, on or before April 1 for administration and enforcement under this Act by the Department of Revenue beginning on the following July 1 and on or before October 1 for administration and enforcement under this Act by the Department of Revenue beginning on the following January 1. The Department of Revenue shall not administer or enforce any change made to the boundaries of a STAR bond district or any address change, addition, or deletion until the political subdivision reports the boundary change or address change, addition, or deletion to the Department of Revenue, with a copy to the Department, in the manner prescribed by the Department of Revenue. The political subdivision must provide this boundary change or address change, addition, or deletion information to the Department of Revenue, with a copy to the Department, on or before April 1 for administration and enforcement by the Department of Revenue of the change, addition, or deletion beginning on the following July 1 and on or before October 1 for administration and enforcement by the Department of Revenue of the change, addition, or deletion beginning on the following January 1. If a retailer is incorrectly included or excluded from the list of those located in the STAR bond district, the Department of Revenue shall be held harmless if the Department reasonably relied on information provided by the political subdivision.

(j) Any STAR bond project must be approved by the political subdivision within 23 years after the date of the approval of the STAR bond district; however, any amendments to the STAR bond project may occur following that date.

(k) Any developer of a STAR bond project shall commence work on the STAR bond project within 3 years from the date of adoption of the STAR bond project plan. If the developer fails to commence work on the STAR bond project within the 3-year period, funding for the project shall cease and the developer of the project or complex shall have one year to appeal to the political subdivision for a one-time reapproval of the project and funding. If the project is reapproved, the 3-year period for commencement shall begin again on the date of the reapproval. If the project is not reapproved or if the developer again fails to commence work on the STAR bond project within the second 3-year period, the project shall be terminated, and the Department may accept applications for a new STAR bond project in the Economic Development Region.

(l) After the adoption of a STAR bond project plan by the corporate authorities of the political subdivision and approval by the Office of the Governor under subsection (d), the political subdivision may authorize the issuance of STAR bonds in one or more series to finance the STAR bond project or pay or reimburse any eligible project cost within the STAR bond district in accordance with the provisions of this Act.

(m) Except as otherwise provided in subsection (n), the maximum maturity of STAR bonds issued to finance a STAR bond project shall not exceed 23 years from the first date of distribution of State sales tax increment from the STAR bond project to the political subdivision unless the political subdivision extends that maturity by resolution up to a maximum of 35 years from such first distribution date. Any such extension shall require the approval of the Office of the Governor, upon the recommendation of the Directors. In no event shall the maximum maturity date for any STAR bonds exceed that date which is 35 years from the first distribution date of the first STAR bonds issued in a STAR bond district.

(n) The maximum maturity of STAR bonds issued to finance a STAR bond project located within a NOVA district shall not exceed 35 years from the first date of distribution of State sales tax increment from the STAR bond project to the political subdivision.

(Source: P.A. 104-453, eff. 12-12-25.)

(50 ILCS 475/5-45)

Sec. 5-45. STAR bonds; source of payment.

(a) Any political subdivision shall have the power to issue STAR bonds in one or more series to finance the undertaking of any STAR bond project in accordance with the provisions of this Act and the Omnibus Bond Acts. Any STAR bond project approved under this Act may be completed in one or more phases, and STAR bonds may be issued, in one or more series, to finance any STAR bond project or phase thereof. STAR bonds may be issued as revenue bonds, alternate bonds, or general obligation bonds as defined in and subject to the procedures provided in the Local Government Debt Reform Act.

STAR bonds may be made payable, both as to principal and interest, from the following revenues, which, to the extent pledged by each respective political subdivision or other public entity for that purpose, shall constitute pledged STAR revenues:

(1) revenues of the political subdivision derived from or held in connection with the undertaking and carrying out of any STAR bond project or projects under this Act;

(2) available private funds and contributions, grants, tax credits, or other financial assistance from the State or federal government;

(3) any taxes created under Section 5-50 and designated as pledged STAR revenues by the political subdivision;

(4) all the local sales tax increment of a municipality, county, or other unit of local government;

(5) any special service area taxes collected within the STAR bond district under the Special Service Area Tax Act, which may be used for the purposes of funding project costs or paying debt service on STAR bonds in addition to the purposes contained in the special service area plan;

(6) all the State sales tax increment;

(7) any other revenues appropriated by the political subdivision; and

(8) any combination of these methods.

(b) The political subdivision may pledge the pledged STAR revenues to the repayment of STAR bonds before, simultaneously with, or after the issuance of the STAR bonds.

(c) Bonds issued as revenue bonds shall not be general obligations of the political subdivision, nor, in any event, shall they give rise to a charge against the political subdivision's general credit or taxing powers or be payable out of any funds or properties other than those set forth in subsection (a). The bonds shall so state on their face.

(d) For each STAR bond project financed with STAR bonds payable from the pledged STAR revenues, the political subdivision shall prepare and submit to the Department, the Department of Revenue, the Office of the Governor, and the Governor's Office of Management and Budget by June 1 of each year a report describing the status of the STAR bond project, any expenditures of the proceeds of STAR bonds that have occurred for the preceding calendar year, and any expenditures of the proceeds of the bonds expected to occur in the future, including the amount of pledged STAR revenue, the amount of revenue that has been spent, the projected amount of the revenue, and the anticipated use of the revenue. Each annual report shall be accompanied by an affidavit of the master developer certifying the contents of the report as true to the best of the master developer's knowledge. The Department shall have the right, but not the obligation, to request the Auditor General to review the annual report and the political subdivision's records containing the source information for the report for the purpose of verifying the report's contents. If the Auditor General declines the request for review, the Department shall have the right to select an independent third-party auditor to conduct an audit of the annual report and the political subdivision's records containing the source information for the report. The reasonable cost of the audit shall be paid by the master developer. The master development agreement shall grant the Department and the Auditor General the right to review the records of the political subdivision containing the source information for the report.

(e) As soon as possible after the first day of each month, upon certification of the Department of Revenue, the Comptroller shall order transferred and the Treasurer shall transfer, from the General Revenue Fund to the STAR Bonds Revenue Fund, the State sales tax increment for the second preceding month, less 3% of that amount, which shall be transferred into the Tax Compliance and Administration Fund and shall be used by the Department of Revenue, subject to appropriation, to cover the costs of the Department of Revenue in administering this Act. As soon as possible after the first day of each month, upon certification of the Department of Revenue, the Comptroller shall order transferred and the Treasurer shall transfer, from the Local Government Tax Fund to the STAR Bonds Revenue Fund, the local sales tax increment for the second preceding month, as provided in Section 6z-18 of the State Finance Act and from the County and Mass Transit District Fund to the STAR Bonds Revenue Fund the local sales tax increment for the second preceding month, as provided in Section 6z-20 of the State Finance Act. On or before the 25th day of each calendar month, the Department of Revenue shall prepare and certify to the Comptroller the disbursement of stated sums of money out of the STAR Bonds Revenue Fund to named municipalities and counties, the municipalities and counties to be those entitled to distribution of taxes or penalties paid to the Department of Revenue during the second preceding calendar month. The amount to be paid to each municipality or county shall be the amount of the State sales tax increment and the local sales tax increment (not including credit memoranda or the amount transferred into the Tax Compliance and Administration Fund) collected during the second preceding calendar month by the Department of Revenue from retailers and servicepersons on transactions at places of business located within a STAR bond district in that municipality or county, plus an amount the Department of Revenue determines is necessary to offset any amounts which 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 of Revenue, and not including any amount which the Department of Revenue determines is necessary to offset any amounts which are payable to a different taxing body but were erroneously paid to the municipality or county. Within 10 days after receipt by the Comptroller of the disbursement certification to the municipalities and counties, which shall be given to the Comptroller by the Department of Revenue, the Comptroller shall cause the orders to be drawn for the respective amounts in accordance with the directions contained in the certification. When certifying the amount of monthly disbursement to a municipality or county under this subsection, the Department of Revenue shall increase or decrease that amount by an amount necessary to offset any misallocation of previous disbursements. The offset amount shall be the amount erroneously disbursed within the 6 months preceding the time a misallocation is discovered. Notwithstanding the foregoing, any local sales tax increment derived from local hotel taxes and visitor investment surcharges that are designated as pledged STAR revenues pursuant to this Act shall not be subject to certification, collection, transfer, or allocation by the Department of Revenue, Comptroller, or Treasurer, and shall instead be deposited directly by the political subdivision into the STAR Bond Revenues Fund in accordance with the applicable STAR bond project plan, ordinance, and bond documents.

(f) The corporate authorities of the political subdivision shall deposit the proceeds for the STAR Bonds Revenue Fund into a special fund of the political subdivision called the "[Name of political subdivision] STAR Bond District Revenue Fund" for the purpose of paying or reimbursing STAR bond project costs and obligations incurred in the payment of those costs. If the political subdivision fails to issue STAR bonds within 180 days after the first distribution to the political subdivision from the STAR Bonds Revenue Fund, the Department of Revenue shall cease distribution of the State sales tax increment to the political subdivision, shall transfer any State sales tax increment in the STAR Bonds Revenue Fund to the General Revenue Fund, and shall cease deposits of State sales tax increment amounts into the STAR Bonds Revenue Fund. The political subdivision shall repay all the State sales tax increment distributed to the political subdivision to date, which amounts shall be deposited into the General Revenue Fund. If not repaid within 90 days after notice from the State, the Department of Revenue shall withhold distributions to the political subdivision from the Local Government Tax Fund until the excess amount is repaid, which withheld amounts shall be transferred to the General Revenue Fund. At such time as the political subdivision notifies the Department of Revenue in writing that it has issued STAR Bonds in accordance with this Act and provides the Department with a copy of the political subdivision's official statement, bond purchase agreements, indenture, or other evidence of bond sale, the Department of Revenue shall resume deposits of the State sales tax increment into the STAR Bonds Revenue Fund and distribution of the State sales tax increment to the political subdivision in accordance with this Section.

(g) If at any time after the seventh anniversary of the date of distribution of State sales tax increment from a STAR bond project the Auditor General determines that the percentage of the aggregate proceeds of STAR bonds issued to date that is derived from the State sales tax increment has exceeded 50% of the total development costs of that STAR Bonds project, no additional STAR bonds may be issued for that STAR Bonds project until that percentage is reduced to 50% or below. When the percentage has been reduced to 50% or below, the master developer shall have the right, at its own cost, to obtain a new audit prepared by an independent third-party auditor verifying compliance and shall provide such audit to the Auditor General for review and approval. Upon the Auditor General's determination from the audit that the percentage has been reduced to 50% or below, STAR bonds may again be issued for the STAR bond project.

(Source: P.A. 104-453, eff. 12-12-25.)

(50 ILCS 475/5-50)

Sec. 5-50. STAR bond occupation taxes.

(a) If the corporate authorities of a political subdivision have established a STAR bond district and have elected to impose a tax by ordinance under subsection (b), or (c), or (c-10) of this Section, each year after the date of the adoption of the ordinance and until all STAR bond project costs and all political subdivision obligations financing the STAR bond project costs, if any, have been paid in accordance with the STAR bond project plans, but in no event longer than the maximum maturity date of the last of the STAR bonds issued for projects in the STAR bond district, 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 political subdivision imposing the tax. The corporate authorities of the political subdivision shall deposit the proceeds of the taxes imposed under subsections (b), and (c), or (c-10) into either (i) a special fund held by the corporate authorities of the political subdivision called the STAR Bonds Tax Allocation Fund for the purpose of paying STAR bond project costs and obligations incurred in the payment of those costs if such taxes are designated as pledged STAR revenues by resolution or ordinance of the political subdivision or (ii) the political subdivision's general corporate fund if such taxes are not designated as pledged STAR revenues by resolution or ordinance.

The tax imposed under this Section by a municipality may be imposed only on the portion of a STAR bond district that is within the boundaries of the municipality. For any part of a STAR bond district that lies outside the boundaries of that municipality, the municipality in which the other part of the STAR bond district lies (or the county, in cases where a portion of the STAR bond district lies in the unincorporated area of a county) is authorized to impose the tax under this Section on that part of the STAR bond district.

(b) The corporate authorities of a political subdivision that has established a STAR bond district under this Act may, by ordinance or resolution, impose a STAR Bond 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 STAR bond district at a rate not to exceed 1% of the gross receipts from the sales made in the course of that business, to be imposed only in 0.25% increments. The tax may not be imposed on tangible personal property taxed at the 1% rate under the Retailers' Occupation Tax Act. The tax may not be imposed on aviation fuel for so long as the revenue use requirements of 49 U.S.C. 47107(b) and 49 U.S.C. 47133 are binding on the political subdivision.

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 of Revenue 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 under this subsection without registering separately with the Department of Revenue 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 of Revenue 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, 5b, 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.

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 STAR Bond Service Occupation Tax shall also be imposed upon all persons engaged, in the STAR bond district, in the business of making sales of service, who, as an incident to making those sales of service, transfer tangible personal property within the STAR bond district, either in the form of tangible personal property or in the form of real estate as an incident to a sale of service. The service occupation tax shall be imposed upon all persons engaged in the business of making sales of service at the same rate as the tax imposed in subsection (b) of the selling price of tangible personal property transferred within the STAR bond district by such servicemen as an incident to a sale of service and shall not exceed 1% and shall be imposed only in 0.25% increments. The tax may not be imposed on tangible personal property taxed at the 1% rate under the Service Occupation Tax Act. The tax may not be imposed on aviation fuel for so long as the revenue use requirements of 49 U.S.C. 47107(b) and 49 U.S.C. 47133 are binding on the political subdivision.

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 of Revenue to a retailer under the Retailers' Occupation Tax Act or under the Service Occupation Tax Act shall permit the registrant to engage in a business that is taxable under any ordinance or resolution enacted under this subsection without registering separately with the Department of Revenue under that 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 provided in this Act, 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 of Revenue 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 STAR bond 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 political subdivision), 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 political subdivision), 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.

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

(c-10) The corporate authorities of any political subdivision that has established a STAR bond district under this Act may, by ordinance or resolution, impose an visitor investment surcharge upon all admission and charges from transactions at places of business located within such STAR bond district, at a rate not to exceed 9% of the gross receipts derived from any admission and charge within such STAR bond district, to be imposed only in 0.25% increments to pay for eligible project cost. The charge imposed under this subsection and all civil penalties that may be assessed as an incident thereof shall be collected and enforced by the political subdivision. For purposes of this section, "visitor investment surcharges" shall include, but shall not be limited to charges for: (a) admission or rental to any physical space or venue in which attendees gather for entertainment or amusement, including but not limited to facilities owned or operated by users, destination hotels, amusement parks, hotels, entertainment venues, or traditional retailers, resorts, golf or pickle ball type facilities, simulator type facilities, music venues, water parks, RV parks, surf parks, ice rinks, family entertainment type facilities, zip line courses, wake boarding courses, miniature golf courses, go-cart tracks or facilities, arcades and other venues designed for the playing of video games, pinball machines, air-hockey, billiards tables, or other games operated by coins or other payment methods, theaters, trade shows and convention centers, and athletic stadiums or venues for the hosting of any athletic context; and (b) any separate charge for admission or rental to or use of entertainment attractions, rides, or other activities within the aforementioned venues. The provisions set out in this subsection (c-10) shall not be subject to subsection (d) of this Section.

(d) Persons subject to any tax imposed under this Section may reimburse themselves for their seller's tax liability under this Section 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 of Revenue determines that a refund should be made under this Section to a claimant the Department of Revenue shall not issue a credit memorandum. The Department of Revenue 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 of Revenue. The refund shall be paid by the State Treasurer out of the STAR Bond Retailers' Occupation Tax Fund.

Except as otherwise provided in this subsection, the Department of Revenue shall immediately pay over to the State Treasurer, ex officio, as trustee, all taxes, penalties, and interest collected under this Section for deposit into the STAR Bond Retailers' Occupation Tax Fund. On or before the 25th day of each calendar month, the Department of Revenue shall prepare and certify to the Comptroller the disbursement of stated sums of money to named political subdivisions from the STAR Bond Retailers' Occupation Tax Fund, the political subdivisions to be those from which retailers have paid taxes or penalties under this Section to the Department of Revenue during the second preceding calendar month. The amount to be paid to each political subdivision shall be the amount (not including credit memoranda) collected under this Section during the second preceding calendar month by the Department of Revenue plus an amount the Department of Revenue 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 of Revenue, less 3% of that amount, which shall be deposited into the Tax Compliance and Administration Fund and shall be used by the Department of Revenue, subject to appropriation, to cover the costs of the Department of Revenue in administering and enforcing the provisions of this Section, on behalf of such political subdivision, and not including any amount that the Department of Revenue determines is necessary to offset any amounts that were payable to a different taxing body but were erroneously paid to the political subdivision. Within 10 days after receipt by the Comptroller of the disbursement certification to the political subdivisions provided for in this Section 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 political subdivisions under this Section shall be deposited into either (i) the STAR Bonds Tax Allocation Fund by the political subdivision if the political subdivision has designated them as pledged STAR revenues by resolution or ordinance or (ii) the political subdivision's general corporate fund if the political subdivision has not designated them as pledged STAR revenues.

An ordinance or resolution imposing or discontinuing the tax under this Section or effecting a change in the rate thereof shall either (i) be adopted and a certified copy thereof filed with the Department of Revenue on or before the first day of April, whereupon the Department of Revenue, if all other requirements of this Section are met, shall proceed to administer and enforce this Section 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 of Revenue on or before the first day of October, whereupon, if all other requirements of this Section are met, the Department of Revenue shall proceed to administer and enforce this Section 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 Section until the political subdivision also provides, in the manner prescribed by the Department of Revenue, the boundaries of the STAR bond district and each address in the STAR bond district in such a way that the Department of Revenue can determine by its address whether a business is located in the STAR bond district. The political subdivision must provide this boundary and address information to the Department of Revenue on or before April 1 for administration and enforcement of the tax under this Section by the Department of Revenue beginning on the following July 1 and on or before October 1 for administration and enforcement of the tax under this Section by the Department of Revenue beginning on the following January 1. The Department of Revenue shall not administer or enforce any change made to the boundaries of a STAR bond district or any address change, addition, or deletion until the political subdivision reports the boundary change or address change, addition, or deletion to the Department of Revenue in the manner prescribed by the Department of Revenue. The political subdivision must provide this boundary change or address change, addition, or deletion information to the Department of Revenue on or before April 1 for administration and enforcement by the Department of Revenue of the change, addition, or deletion beginning on the following July 1 and on or before October 1 for administration and enforcement by the Department of Revenue of the change, addition, or deletion beginning on the following January 1. The retailers in the STAR bond district shall be responsible for charging the tax imposed under this Section. If a retailer is incorrectly included or excluded from the list of those required to collect the tax under this Section, both the Department of Revenue and the retailer shall be held harmless if they reasonably relied on information provided by the political subdivision.

A political subdivision that imposes the tax under this Section must submit to the Department of Revenue any other information as the Department of Revenue may require that is necessary for the administration and enforcement of the tax.

When certifying the amount of a monthly disbursement to a political subdivision under this Section, the Department of Revenue 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 Section shall be construed to authorize the political subdivision 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 provisions of this subsection (d) shall only apply to taxes imposed under subsection (b) and subsection (c)of this Section.

(e) When STAR bond project costs, including, without limitation, all political subdivision obligations financing STAR bond project costs, have been paid, any surplus funds then remaining in the STAR Bonds Tax Allocation Fund shall be distributed to the treasurer of the political subdivision for deposit into the political subdivision's general corporate fund. Upon payment of all STAR bond project costs and retirement of obligations, but in no event later than the maximum maturity date of the last of the STAR bonds issued in the STAR bond district, the political subdivision shall adopt an ordinance immediately rescinding the taxes imposed under this Section and file a certified copy of the ordinance with the Department of Revenue in the form and manner as described in this Section.

(Source: P.A. 104-453, eff. 12-12-25.)

(50 ILCS 475/5-75)

Sec. 5-75. Reporting taxes.

(a) Notwithstanding any other provisions of law to the contrary, the Department of Revenue shall provide a certified report of the State sales tax increment and local sales tax increment from all taxpayers within a STAR bond district to the bond trustee, escrow agent, or paying agent for such bonds upon the written request of the political subdivision on or before the 25th day of each month. Such report shall provide a detailed allocation of State sales tax increment and local sales tax increment from each local sales tax and State sales tax reported to the Department of Revenue.

The bond trustee, escrow agent, or paying agent shall keep such sales and use tax reports and the information contained therein confidential, but may use such information for purposes of allocating and depositing the sales and use tax revenues in connection with the bonds used to finance project costs in such STAR bond district. Except as otherwise provided in this Section, the sales and use tax reports received by the bond trustee, escrow agent, or paying agent shall be subject to the confidentiality provisions of Section 11 of the Retailers' Occupation Tax Act. Notwithstanding the provisions of this Section, any local sales tax increment derived from local hotel taxes and visitor investment surcharges that are designated as pledged STAR revenues pursuant to this Act shall not be included in the Department of Revenue's certified report and shall instead be reported to the bond trustee, escrow agent, or paying agent by the political subdivision in such form and manner as may be provided in the applicable bond documents.

(b) The political subdivision shall determine when the amount of sales tax and other revenues that have been collected and distributed to the bond debt service or reserve fund is sufficient to satisfy all principal and interest costs to the maturity date or dates of any STAR bond issued by a political subdivision to finance a STAR bond project and shall give the Department of Revenue written notice of such determination. The notice shall include a date certain on which deposits into the STAR Bonds Revenue Fund for that STAR bond project shall terminate and shall be provided to the Department of Revenue at least 60 days prior to that date. Thereafter, all sales tax and other revenues shall be collected and distributed in accordance with applicable law.

If the political subdivision fails to give timely notice under this subsection (b), the Department of Revenue, upon discovery of this failure, shall cease distribution of the State sales tax increment to the political subdivision, shall transfer any State sales tax increment in the STAR Bonds Revenue Fund to the General Revenue Fund, and shall cease deposits of State sales tax increment amounts into the STAR Bonds Revenue Fund. Any amount of State sales tax increment distributed to the political subdivision from the STAR Bonds Revenue Fund in excess of the amount sufficient to satisfy all principal and interest costs to the maturity date or dates of any STAR bond issued by the political subdivision to finance a STAR bond project shall be repaid to the Department of Revenue and deposited into the General Revenue Fund. If not repaid within 90 days after notice from the State, the Department of Revenue shall withhold distributions to the political subdivision from the Local Government Tax Fund until the excess amount is repaid, which withheld amounts shall be transferred to the General Revenue Fund.

(Source: P.A. 104-453, eff. 12-12-25.)