HB3418 100TH GENERAL ASSEMBLY

LRB100 10990 AWJ 21229 b

100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
HB3418

Introduced , by Rep. Sonya M. Harper

SYNOPSIS AS INTRODUCED:

See Index

Amends the Counties Code and Illinois Municipal Code. Provides that a county or municipality may create an urban agricultural zones (UAZ) composed of organizations or persons who grow produce or other agricultural products; who raise livestock or poultry; who process livestock or poultry; or that sell a minimum of 75% locally grown food. Provides for the creation of a UAZ board to advise the county board, county board of commissioners, or corporate authorities of a municipality on UAZs. Provides for UAZ application requirements, including the number of jobs to be created, the types of products to be produced, and if applying for a vending UAZ, the ability to accept food stamps under the provisions of the Supplemental Nutrition Assistance Program if selling products to consumers. Provides for county and municipal public hearing and notice requirements before adoption of an ordinance to establish a UAZ. Provides that property taxes on property located within a UAZ shall not be increased, if so provided in the UAZ ordinance, for a period of up to 25 years. Provides that sales tax amounts received from the sale of agricultural products sold in a UAZ shall be deposited in the Urban Agricultural Zone Fund and specifies distribution to the county, municipality, or school districts under specified circumstances. Allows for wholesale water rates and a reduction in water connection charges for property in a UAZ. Amends the State Finance Act making conforming changes.

FISCAL NOTE ACT MAY APPLY

HOUSING AFFORDABILITY IMPACT NOTE ACT MAY APPLY

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. The State Finance Act is amended by adding Section 5.878 to Article 5 as follows:

(30 ILCS 105/5.878 new)

Sec. 5.878. The Urban Agricultural Zone Fund.

Section 5. The Counties Code is amended by adding Division 5-45 as follows:

(55 ILCS 5/Div. 5-45 heading new)

Division 5-45. County Urban Agricultural Zones

(55 ILCS 5/5-45005 new)

Sec. 5-45005. Definitions. As used in this Division:

"Agricultural products" means an agricultural, horticultural, viticultural, or vegetable product either in its natural or processed state, that has been produced, processed, or otherwise had value added to it in this State. "Agricultural products" includes, but is not limited to, growing of grapes that will be processed into wine; bees; honey; fish or other aquacultural product; planting seed; livestock or livestock product; forestry product; and poultry or poultry product.

"Aquaculture" and "aquatic products" have the meanings given to those terms in Section 4 of the Aquaculture Development Act.

"Blighted area" means that portion of the county within which the county board determines that by reason of age, obsolescence, inadequate or outmoded design, or physical deterioration have become economic and social liabilities, and that these conditions are conducive to ill health, transmission of disease, crime, or inability to pay reasonable taxes.

"Department" means the Department of Agriculture.

"Domesticated animal" means cattle; calves; sheep; swine; ratite birds, including, but not limited to, ostrich and emu; llamas; alpaca; buffalo; elk documented as obtained from a legal source and not from the wild; goats; horses and other equines; or rabbits raised in confinement for human consumption.

"Grower UAZ" means a type of UAZ:

(1) that can either grow produce, raise livestock, or produce other value added agricultural products; and

(2) that does not exceed fifty laying hens, six hundred fifty broiler chickens, or thirty domesticated animals.

"Livestock" means cattle; calves; sheep; swine; ratite birds including but not limited to ostrich and emu; aquatic products obtained through aquaculture; llamas; alpaca; buffalo; elk documented as obtained from a legal source and not from the wild; goats; horses and other equines; or rabbits raised in confinement for human consumption.

"Locally grown" means a product that was grown or raised in the same county or adjoining county in which the UAZ is located.

"Meat" means any edible portion of livestock or poultry carcass.

"Meat product" means anything containing meat intended for or capable of use for human consumption, which is derived, in whole or in part, from livestock or poultry.

"Poultry" means any domesticated bird intended for human consumption.

"Processing UAZ" means a type of UAZ:

(1) that processes livestock or poultry for human consumption;

(2) that meets federal and State processing laws and standards; or

(3) is a qualifying small business approved by the Department.

"Public colleges and universities" has the meaning given to that term in Section 5 of the Higher Education Veterans Service Act.

"Sales tax amounts" means the amount of taxes paid under the Retailers' Occupation Tax Act, Use Tax Act, Service Use Tax Act, the Service Occupation Tax Act, the Municipal Retailers' Occupation Tax Act, and the Municipal Service Occupation Tax Act by retailers and servicemen on transactions at places located in a UAZ.

"Qualifying small business" means those enterprises which are established within an Urban Agricultural Zone subsequent to its creation, and which meet the definition established for the federal Small Business Administration and set forth in Section 121.301 of Part 121 of Title 13 of the Code of Federal Regulations.

"Value added agricultural products" means any product or products that are the result of:

(1) using an agricultural product grown in this State to produce a meat or dairy product in this State;

(2) a change in the physical state or form of the original agricultural product;

(3) an agricultural product grown in this State which has had its value enhanced by special production methods such as organically grown products; or

(4) a physical segregation of a commodity or agricultural product grown in this State that enhances its value such as identity preserved marketing systems.

"Urban agricultural zone" or "UAZ" means a zone within a metropolitan statistical area, as defined by the United States Office of Budget and Management, that has one or more of the following entities that is a qualifying small businesses, and approved by the Department, as follows:

(1) any organization or person who grows produce or other agricultural products;

(2) any organization or person that raises livestock or poultry;

(3) any organization or person who processes livestock or poultry; or

(4) any organization that sells at a minimum 75% locally grown food.

"Vending UAZ" means a type of UAZ:

(1) that sells produce, meat, or value added locally grown agricultural goods;

(2) that is able to accept food stamps under the provisions of the Supplemental Nutrition Assistance Program as a form of payment; and

(3) is a qualifying small business that is approved by the Department for a UAZ vendor license.

(55 ILCS 5/5-45010 new)

Sec. 5-45010. Urban agricultural zone board.

(a) The county board or county board of commissioners of any county planning to seek designation of an urban agricultural zone shall establish an urban agricultural zone board. There shall be 7 members on the board. One member of the board shall be appointed by the school district or districts located within the area proposed for designation as an urban agricultural zone. Two members of the board shall be appointed by other affected taxing units of local government. The remaining 4 members shall be appointed by the county executive, or if no county executive, then the county board. The 4 members chosen by the county executive or county board shall all be residents of the county in which the UAZ is to be located, and at least one of the 4 members shall have experience in or represent an organization associated with sustainable agriculture, urban farming, community gardening, or any of the activities or products authorized by this Division for UAZs.

(b) The school district member and the 2 affected taxing unit of local government members shall each have initial terms of 5 years. Of the 4 members appointed by the county executive or county board, 2 shall have initial terms of 4 years, and 2 shall have initial terms of 3 years. Thereafter, members shall serve terms of 5 years. Each member shall hold office until a successor has been appointed. All vacancies shall be filled in the same manner as the original appointment. For inefficiency, neglect of duty, or misconduct in office, a member of the board may be removed by the applicable appointing authority.

(c) The members of the board annually shall elect a chair from among the members.

(d) A majority of the members shall constitute a quorum of the board for the purpose of conducting business and exercising the powers of the board and for all other purposes. Action may be taken by the board upon a vote of a majority of the members present.

(e) The role of the board shall be to conduct the activities necessary to advise the county board or county board of commissioners on the designation of an urban agricultural zone and any other advisory duties as determined by the county board or county board of commissioners. The role of the board after the designation of an urban agricultural zone shall be review and assessment of zone activities.

(55 ILCS 5/5-45015 new)

Sec. 5-45015. Application for an urban agricultural zone; review; dissolution.

(a) A person or organization may submit to the county clerk an application to develop a UAZ in a blighted area. The application shall demonstrate or identify on the application:

(1) if the person or organization is a grower UAZ, processing UAZ, vending UAZ, or a combination of all three types of UAZs in which case the person or organization shall meet the requirements of each type of UAZ in order to qualify;

(2) the number of jobs to be created;

(3) the types of products to be produced; and

(4) if applying for a vending UAZ, the ability to accept food stamps under the provisions of the Supplemental Nutrition Assistance Program if selling products to consumers.

(b) A county shall review and modify the application as necessary before either approving or denying the request to establish a UAZ.

(c) Approval of the UAZ by a county shall be reviewed 5 and 10 years after the development of the UAZ. After 25 years, the UAZ shall dissolve. If the county finds during its review that the UAZ is not meeting the requirements set out in this Division, the county may dissolve the UAZ by ordinance or resolution.

(55 ILCS 5/5-45020 new)

Sec. 5-45020. Notice and public hearing; urban agricultural zone ordinance. Prior to the adoption of an ordinance designating an urban agricultural zone, the urban agricultural board shall fix a time and place for a public hearing and notify each taxing unit of local government located wholly or partially within the boundaries of the proposed urban agricultural zone. The board shall send, by certified mail, a notice of the hearing to all taxing units of local government and shall publish notice of such hearing in a newspaper of general circulation in the area to be affected by the designation at least 20 days prior to the hearing but not more than 30 days prior to the hearing. The notice shall state the time, location, date, and purpose of the hearing. At the public hearing, any interested person or affected taxing unit of local government may file with the board written objections or comments and may be heard orally in respect to, any issues embodied in the notice. The board shall hear and consider all objections, comments, and other evidence presented at the hearing. The hearing may be continued to another date without further notice other than a motion to be entered upon the minutes fixing the time and place of the subsequent hearing.

Following the conclusion of the public hearing required under this Section, the county board or county board of commissioners may adopt an ordinance designating an urban agricultural zone.

A county UAZ may not overlap a municipal UAZ established under Division 15.4 of Article 11 of the Illinois Municipal Code.

(55 ILCS 5/5-45025 new)

Sec. 5-45025. Taxation of property; water rates and charges.

(a) Real property located within a UAZ shall not be subject to assessment or payment of ad valorem taxes on real property imposed by the State or any unit of local government for a period of tax abatement of up to 25 years as specified by ordinance under Section 5-45020 except in an amount not greater than the amount of taxes assessed in the levy year immediately preceding the levy year during which the UAZ was designated. The amounts of the tax assessed shall not be increased during the period stated in the ordinance as long as the real property is used in furtherance of the activities provided under this Division. At the conclusion of the period of abatement provided by the ordinance, the property shall then be reassessed. If only a portion of real property is used as a UAZ, then only that portion of real property shall be exempt from assessment or payment of ad valorem taxes on the property as provided by this Section.

(b) Any sales tax amounts received from the sale of agricultural products sold in the UAZ shall be deposited in the Urban Agricultural Zone Fund established in Section 5-45030 of this Division. An amount equal to 1% shall be retained by the Director of the Department of Revenue for deposit in the General Revenue Fund to offset the costs of collection.

(c) Any entity providing water to the UAZ may authorize a grower UAZ to (1) pay wholesale water rates, if available, or (2) pay 50% of the standard connection charge.

(55 ILCS 5/5-45030 new)

Sec. 5-45030. The Urban Agricultural Zone Fund.

(a) The Urban Agricultural Zone Fund, a special fund created in the State treasury, shall consist of moneys collected under subsection (b) of Section 5-45025 of this Division and Section 11-15.4-25 of Division 15.4 of Article 11 of the Illinois Municipal Code. Except as provided for in subsection (b), the Comptroller shall order transferred before the end of each quarter of the fiscal year, and the Treasurer shall transfer, an amount equal to the moneys collected from county UAZs within the previous quarter.

(b) A school district or school districts inside a UAZ may apply to the Department for money in the fund to be used for the development of curriculum on or the implementation of urban farming practices under the guidance of a public college or university. The funds are to be distributed on a competitive basis within the school district or districts in which the UAZ is located pursuant to rules published by the Department, with special consideration given to the relative number of students eligible for free and reduced-price lunches attending the schools within the district or districts. The Department may designate up to 10% of moneys from quarterly sales tax amounts in the Agricultural Zone Fund to school districts under this subsection (b). The Department shall notify the Comptroller of any moneys awarded to a school district under this subsection (b) no later than 14 days before the end of each quarter and the Comptroller shall reduce the amount ordered transferred to the county by that amount.

(55 ILCS 5/5-45035 new)

Sec. 5-45035. Severability. The provisions of this Division are severable under Section 1.31 of the Statute on Statutes.

Section 10. The Illinois Municipal Code is amended by adding Division 15.4 to Article 11 as follows:

(65 ILCS 5/Art. 11 Div. 15.4 heading new)

DIVISION 15.4. MUNICIPAL URBAN AGRICULTURAL ZONES

(65 ILCS 5/11-15.4-5 new)

Sec. 11-15.4-5. Definitions. As used in this Division:

"Agricultural products" means an agricultural, horticultural, viticultural, or vegetable product either in its natural or processed state, that has been produced, processed, or otherwise had value added to it in this State. "Agricultural products" includes, but is not limited to, growing of grapes that will be processed into wine; bees; honey; fish or other aquacultural product; planting seed; livestock or livestock product; forestry product; and poultry or poultry product.

"Aquaculture" and "aquatic products" have the meanings given to those terms in Section 4 of the Aquaculture Development Act.

"Blighted area" means that portion of a municipality within which the corporate authorities of the municipality determines that by reason of age, obsolescence, inadequate or outmoded design, or physical deterioration have become economic and social liabilities, and that these conditions are conducive to ill health, transmission of disease, crime, or inability to pay reasonable taxes.

"Department" means the Department of Agriculture.

"Domesticated animal" means cattle; calves; sheep; swine; ratite birds, including, but not limited to, ostrich and emu; llamas; alpaca; buffalo; elk documented as obtained from a legal source and not from the wild; goats; horses and other equines; or rabbits raised in confinement for human consumption.

"Grower UAZ" means a type of UAZ:

(1) that can either grow produce, raise livestock, or produce other value added agricultural products; and

(2) that does not exceed fifty laying hens, six hundred fifty broiler chickens, or thirty domesticated animals.

"Livestock" means cattle; calves; sheep; swine; ratite birds including but not limited to ostrich and emu; aquatic products obtained through aquaculture; llamas; alpaca; buffalo; elk documented as obtained from a legal source and not from the wild; goats; horses and other equines; or rabbits raised in confinement for human consumption.

"Locally grown" means a product that was grown or raised in the same county or adjoining county in which the UAZ is located.

"Meat" means any edible portion of livestock or poultry carcass.

"Meat product" means anything containing meat intended for or capable of use for human consumption, which is derived, in whole or in part, from livestock or poultry.

"Poultry" means any domesticated bird intended for human consumption.

"Processing UAZ" means a type of UAZ:

(1) that processes livestock or poultry for human consumption;

(2) that meets federal and State processing laws and standards; or

(3) is a qualifying small business approved by the Department.

"Public colleges and universities" has the meaning given to that term in Section 5 of the Higher Education Veterans Service Act.

"Sales tax amounts" means the amount of taxes paid under the Retailers' Occupation Tax Act, Use Tax Act, Service Use Tax Act, the Service Occupation Tax Act, the Municipal Retailers' Occupation Tax Act, and the Municipal Service Occupation Tax Act by retailers and servicemen on transactions at places located in a UAZ.

"Qualifying small business" means those enterprises which are established within an Urban Agricultural Zone subsequent to its creation, and which meet the definition established for the federal Small Business Administration and set forth in Section 121.301 of Part 121 of Title 13 of the Code of Federal Regulations.

"Value added agricultural products" means any product or products that are the result of:

(1) using an agricultural product grown in this State to produce a meat or dairy product in this State;

(2) a change in the physical state or form of the original agricultural product;

(3) an agricultural product grown in this State which has had its value enhanced by special production methods such as organically grown products; or

(4) a physical segregation of a commodity or agricultural product grown in this State that enhances its value such as identity preserved marketing systems.

"Urban agricultural zone" or "UAZ" means a zone within a metropolitan statistical area, as defined by the United States Office of Budget and Management, which has one or more of the following entities that is a qualifying small businesses, and approved by the Department, as follows:

(1) any organization or person who grows produce or other agricultural products;

(2) any organization or person that raises livestock or poultry;

(3) any organization or person who processes livestock or poultry; or

(4) any organization that sells at a minimum 75% locally grown food.

"Vending UAZ" means a type of UAZ:

(1) that sells produce, meat, or value added locally grown agricultural goods;

(2) that is able to accept food stamps under the provisions of the Supplemental Nutrition Assistance Program as a form of payment; and

(3) is a qualifying small business that is approved by the Department for a UAZ vendor license.

(65 ILCS 5/11-15.4-10 new)

Sec. 11-15.4-10. Urban agricultural zone board.

(a) The corporate authorities of a municipality planning to seek designation of an urban agricultural zone shall establish an urban agricultural zone board. There shall be 7 members on the board. One member of the board shall be appointed by the school district or districts located within the area proposed for designation as an urban agricultural zone. Two members of the board shall be appointed by other affected taxing units of local government. The remaining 4 members shall be appointed by the president or mayor of the municipality. The 4 members chosen by the president or mayor shall all be residents of the municipality in which the UAZ is to be located, and at least one of the 4 members shall have experience in or represent an organization associated with sustainable agriculture, urban farming, community gardening, or any of the activities or products authorized by this Division for UAZs.

(b) The school district member and the 2 affected taxing unit of local government members shall each have initial terms of 5 years. Of the 4 members appointed by the president or mayor, 2 shall have initial terms of 4 years, and 2 shall have initial terms of 3 years. Thereafter, members shall serve terms of 5 years. Each member shall hold office until a successor has been appointed. All vacancies shall be filled in the same manner as the original appointment. For inefficiency, neglect of duty, or misconduct in office, a member of the board may be removed by the applicable appointing authority.

(c) The members of the board annually shall elect a chair from among the members.

(d) A majority of the members shall constitute a quorum of the board for the purpose of conducting business and exercising the powers of the board and for all other purposes. Action may be taken by the board upon a vote of a majority of the members present.

(e) The role of the board shall be to conduct the activities necessary to advise the corporate authorities of the municipality on the designation of an urban agricultural zone and any other advisory duties as determined by the corporate authorities of the municipality. The role of the board after the designation of an urban agricultural zone shall be review and assessment of zone activities.

(65 ILCS 5/11-15.4-15 new)

Sec. 11-15.4-15. Application for an urban agricultural zone; review; dissolution.

(a) A person or organization may submit to the municipal clerk an application to develop a UAZ in a blighted area. The application shall demonstrate or identify on the application:

(1) if the person or organization is a grower UAZ, processing UAZ, vending UAZ, or a combination of all three types of UAZs in which case the person or organization shall meet the requirements of each type of UAZ in order to qualify;

(2) the number of jobs to be created;

(3) the types of products to be produced; and

(4) if applying for a vending UAZ, the ability to accept food stamps under the provisions of the Supplemental Nutrition Assistance Program if selling products to consumers.

(b) A municipality shall review and modify the application as necessary before either approving or denying the request to establish a UAZ.

(c) Approval of the UAZ by a municipality shall be reviewed 5 and 10 years after the development of the UAZ. After 25 years, the UAZ shall dissolve. If the municipality finds during its review that the UAZ is not meeting the requirements set out in this Division, the municipality may dissolve the UAZ by ordinance or resolution.

(65 ILCS 5/11-15.4-20 new)

Sec. 11-15.4-20. Notice and public hearing; urban agricultural zone ordinance. Prior to the adoption of an ordinance designating an urban agricultural zone, the urban agricultural zone board shall fix a time and place for a public hearing and notify each taxing unit of local government located wholly or partially within the boundaries of the proposed urban agricultural zone. The board shall send, by certified mail, a notice of the hearing to all taxing units of local government and shall publish notice of such hearing in a newspaper of general circulation in the area to be affected by the designation at least 20 days prior to the hearing but not more than 30 days prior to the hearing. The notice shall state the time, location, date, and purpose of the hearing. At the public hearing, any interested person or affected taxing unit of local government may file with the board written objections or comments and may be heard orally in respect to, any issues embodied in the notice. The board shall hear and consider all objections, comments, and other evidence presented at the hearing. The hearing may be continued to another date without further notice other than a motion to be entered upon the minutes fixing the time and place of the subsequent hearing.

Following the conclusion of the public hearing required under this Section, the corporate authorities of the municipality may adopt an ordinance designating an urban agricultural zone.

A municipal UAZ may not overlap a county UAZ established under Division 5-45 of Article 5 of the Counties Code.

(65 ILCS 5/11-15.4-25 new)

Sec. 11-15.4-25. Taxation of property; water rates and charges.

(a) Real property located within a UAZ shall not be subject to assessment or payment of ad valorem taxes on real property imposed by the State or any unit of local government for a period of tax abatement of up to 25 years as specified by ordinance under Section 11-15.4-20 except in an amount not greater than the amount of taxes assessed in the levy year immediately preceding the levy year during which the UAZ was designated. The amounts of the tax assessed shall not be increased during the period stated in the ordinance as long as the real property is used in furtherance of the activities provided under this Division. At the conclusion of the period of abatement provided by the ordinance, the property shall then be reassessed. If only a portion of real property is used as a UAZ, then only that portion of real property shall be exempt from assessment or payment of ad valorem taxes on the property as provided by this Section.

(b) Any sales tax amounts received from the sale of agricultural products sold in the UAZ shall be deposited in the Urban Agricultural Zone Fund established in Section 11-15.4-30 of this Division. An amount equal to 1% shall be retained by the Director of the Department of Revenue for deposit in the General Revenue Fund to offset the costs of collection.

(c) Any entity providing water to the UAZ may authorize a grower UAZ to (1) pay wholesale water rates, if available, or (2) pay 50% of the standard connection charge.

(65 ILCS 5/11-15.4-30 new)

Sec. 11-15.4-30. The Urban Agricultural Zone Fund.

(a) The Urban Agricultural Zone Fund, a special fund created in the State treasury, shall consist of moneys collected under Section 5-45025 of Article 5 of the Counties Code and Section 11-15.4-25 of this Division. Except as provided for in subsection (b), the Comptroller shall order transferred before the end of each quarter of the fiscal year, and the Treasurer shall transfer, an amount equal to the moneys collected from the municipal UAZs within the previous quarter.

(b) A school district or school districts inside a UAZ may apply to the Department for money in the fund to be used for the development of curriculum on or the implementation of urban farming practices under the guidance of a public college or university. The funds are to be distributed on a competitive basis within the school district or districts in which the UAZ is located pursuant to rules published by the Department, with special consideration given to the relative number of students eligible for free and reduced-price lunches attending the schools within the district or districts. The Department may designate up to 10% of moneys from quarterly sales tax amounts in the Agricultural Zone Fund to school districts under this subsection (b). The Department shall notify the Comptroller of any moneys awarded to a school district under this subsection (b) no later than 14 days before the end of each quarter and the Comptroller shall reduce the amount ordered transferred to the municipality by that amount.

(65 ILCS 5/11-15.4-35 new)

Sec. 11-15.4-35. Severability. The provisions of this Division are severable under Section 1.31 of the Statute on Statutes.