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Full Text of SB2413  102nd General Assembly

SB2413 102ND GENERAL ASSEMBLY

  
  

 


 
102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
SB2413

 

Introduced 2/26/2021, by Sen. Napoleon Harris, III

 

SYNOPSIS AS INTRODUCED:
 
See Index

    Amends the State Finance Act. Creates the Financially Distressed Cities Fund. Amends the State Revenue Sharing Act and the Illinois Income Tax Act. Provides that the Comptroller shall monthly transfer to the Financially Distressed Cities Fund an amount certified by the Department of Revenue equal to: (1) the amount that would have been distributed under the State Revenue Sharing Act to all financially distressed cities if the Treasurer had transferred to the Local Government Distributive Fund a sum calculated using 10% of the net revenue realized from the tax imposed by the Illinois Income Tax Act upon individuals, trusts, estates, and corporations during the preceding month; and (2) subtracting the amount distributed to all financially distressed cities from the Local Government Distributive Fund. Provides that the Department of Revenue shall monthly allocate an amount from the Financially Distressed Cities Fund that shall be paid to each financially distressed city. Amends the Financially Distressed City Law of the Illinois Municipal Code. Makes the law applicable to both home rule and non-home rule municipalities. Provides that a State agency or unit of local government may also render technical assistance to a municipality's Financial Advisory Authority as the Authority may request. Provides that the State shall not reduce revenues or impose additional costs affecting a financially distressed city affecting the municipality unless it is consistent with the Financial Plan and Budget in effect. Provides that State mandates enacted while a municipality is designated as a financially distressed city that would cause the municipality to incur costs are not valid or enforceable during the period when the municipality is under the financially distressed city designation. Effective January 1, 2022.


LRB102 11630 AWJ 16964 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

SB2413LRB102 11630 AWJ 16964 b

1    AN ACT concerning local government.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The State Finance Act is amended by adding
5Section 5.935 as follows:
 
6    (30 ILCS 105/5.935 new)
7    Sec. 5.935. The Financially Distressed Cities Fund.
 
8    Section 10. The State Revenue Sharing Act is amended by
9changing Section 2 as follows:
 
10    (30 ILCS 115/2)  (from Ch. 85, par. 612)
11    Sec. 2. Allocation and Disbursement.
12    (a) As soon as may be after the first day of each month,
13the Department of Revenue shall allocate among the several
14municipalities and counties of this State the amount available
15in the Local Government Distributive Fund and in the Income
16Tax Surcharge Local Government Distributive Fund, determined
17as provided in Sections 1 and 1a above. Except as provided in
18Sections 13 and 13.1 of this Act, the Department shall then
19certify such allocations to the State Comptroller, who shall
20pay over to the several municipalities and counties the
21respective amounts allocated to them. The amount of such Funds

 

 

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1allocable to each such municipality and county shall be in
2proportion to the number of individual residents of such
3municipality or county to the total population of the State,
4determined in each case on the basis of the latest census of
5the State, municipality or county conducted by the Federal
6government and certified by the Secretary of State and for
7annexations to municipalities, the latest Federal, State or
8municipal census of the annexed area which has been certified
9by the Department of Revenue. Allocations to the City of
10Chicago under this Section are subject to Section 6 of the
11Hotel Operators' Occupation Tax Act. For the purpose of this
12Section, the number of individual residents of a county shall
13be reduced by the number of individuals residing therein in
14municipalities, but the number of individual residents of the
15State, county and municipality shall reflect the latest census
16of any of them. The amounts transferred into the Local
17Government Distributive Fund pursuant to Section 9 of the Use
18Tax Act, Section 9 of the Service Use Tax Act, Section 9 of the
19Service Occupation Tax Act, and Section 3 of the Retailers'
20Occupation Tax Act, each as now or hereafter amended, pursuant
21to the amendments of such Sections by Public Act 85-1135,
22shall be distributed as provided in said Sections.
23    (a-5) The Department of Revenue shall allocate, as soon as
24may be practicable after the first day of each month, among
25each financially distressed city, as that term is defined in
26Section 8-12-3 of the Illinois Municipal Code, funds

 

 

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1transferred to the Financially Distressed Cities Fund under
2subsection (b-5) of Section 901 of the Illinois Income Tax
3Act. The Department shall then pay over to each financially
4distressed city the respective amounts allocated to it. The
5amount of funds allocable to each financially distressed city
6shall be in proportion to the number of individual residents
7of the financially distressed city to the total population of
8all financially distressed cities combined, determined in each
9case on the basis of the latest census of the State,
10municipality, or county conducted by the Federal government
11and certified by the Secretary of State and for annexations to
12municipalities, the latest Federal, State, or municipal census
13of the annexed area which has been certified by the Department
14of Revenue.
15    (b) It is the intent of the General Assembly that
16allocations made under this Section shall be made in a fair and
17equitable manner. Accordingly, the clerk of any municipality
18to which territory has been annexed, or from which territory
19has been disconnected, shall notify the Department of Revenue
20in writing of that annexation or disconnection and shall (1)
21state the number of residents within the territory that was
22annexed or disconnected, based on the last census conducted by
23the federal, State, or municipal government and certified by
24the Illinois Secretary of State, and (2) furnish therewith a
25certified copy of the plat of annexation or, in the case of
26disconnection, the ordinance, final judgment, or resolution of

 

 

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1disconnection together with an accurate depiction of the
2territory disconnected. The county in which the annexed or
3disconnected territory is located shall verify that the number
4of residents stated on the written notice that is to be sent to
5the Department of Revenue is true and accurate. The verified
6statement of the county shall accompany the written notice.
7However, if the county does not respond to the municipality's
8request for verification within 30 days, this verification
9requirement shall be waived. The written notice shall be
10provided to the Department of Revenue (1) within 30 days after
11the effective date of this amendatory Act of the 96th General
12Assembly for disconnections occurring after January 1, 2007
13and before the effective date of this amendatory Act of the
1496th General Assembly or (2) within 30 days after the
15annexation or disconnection for annexations or disconnections
16occurring on or after the effective date of this amendatory
17Act of the 96th General Assembly. For purposes of this
18Section, a disconnection or annexation through court order is
19deemed to be effective 30 days after the entry of a final
20judgment order, unless stayed pending appeal. Thereafter, the
21monthly allocation made to the municipality and to any other
22municipality or county affected by the annexation or
23disconnection shall be adjusted in accordance with this
24Section to reflect the change in residency of the residents of
25the territory that was annexed or disconnected. The adjustment
26shall be made no later than 30 days after the Department of

 

 

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1Revenue's receipt of the written notice of annexation or
2disconnection described in this Section.
3(Source: P.A. 96-1040, eff. 7-14-10.)
 
4    Section 15. The Illinois Income Tax Act is amended by
5changing Section 901 as follows:
 
6    (35 ILCS 5/901)
7    (Text of Section without the changes made by P.A. 101-8,
8which did not take effect (see Section 99 of P.A. 101-8))
9    Sec. 901. Collection authority.
10    (a) In general. The Department shall collect the taxes
11imposed by this Act. The Department shall collect certified
12past due child support amounts under Section 2505-650 of the
13Department of Revenue Law of the Civil Administrative Code of
14Illinois. Except as provided in subsections (b), (c), (e),
15(f), (g), and (h) of this Section, money collected pursuant to
16subsections (a) and (b) of Section 201 of this Act shall be
17paid into the General Revenue Fund in the State treasury;
18money collected pursuant to subsections (c) and (d) of Section
19201 of this Act shall be paid into the Personal Property Tax
20Replacement Fund, a special fund in the State Treasury; and
21money collected under Section 2505-650 of the Department of
22Revenue Law of the Civil Administrative Code of Illinois shall
23be paid into the Child Support Enforcement Trust Fund, a
24special fund outside the State Treasury, or to the State

 

 

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1Disbursement Unit established under Section 10-26 of the
2Illinois Public Aid Code, as directed by the Department of
3Healthcare and Family Services.
4    (b) Local Government Distributive Fund. Beginning August
51, 2017, the Treasurer shall transfer each month from the
6General Revenue Fund to the Local Government Distributive Fund
7an amount equal to the sum of (i) 6.06% (10% of the ratio of
8the 3% individual income tax rate prior to 2011 to the 4.95%
9individual income tax rate after July 1, 2017) of the net
10revenue realized from the tax imposed by subsections (a) and
11(b) of Section 201 of this Act upon individuals, trusts, and
12estates during the preceding month and (ii) 6.85% (10% of the
13ratio of the 4.8% corporate income tax rate prior to 2011 to
14the 7% corporate income tax rate after July 1, 2017) of the net
15revenue realized from the tax imposed by subsections (a) and
16(b) of Section 201 of this Act upon corporations during the
17preceding month. Net revenue realized for a month shall be
18defined as the revenue from the tax imposed by subsections (a)
19and (b) of Section 201 of this Act which is deposited in the
20General Revenue Fund, the Education Assistance Fund, the
21Income Tax Surcharge Local Government Distributive Fund, the
22Fund for the Advancement of Education, and the Commitment to
23Human Services Fund during the month minus the amount paid out
24of the General Revenue Fund in State warrants during that same
25month as refunds to taxpayers for overpayment of liability
26under the tax imposed by subsections (a) and (b) of Section 201

 

 

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1of this Act.
2    Notwithstanding any provision of law to the contrary,
3beginning on July 6, 2017 (the effective date of Public Act
4100-23), those amounts required under this subsection (b) to
5be transferred by the Treasurer into the Local Government
6Distributive Fund from the General Revenue Fund shall be
7directly deposited into the Local Government Distributive Fund
8as the revenue is realized from the tax imposed by subsections
9(a) and (b) of Section 201 of this Act.
10    For State fiscal year 2020 only, notwithstanding any
11provision of law to the contrary, the total amount of revenue
12and deposits under this Section attributable to revenues
13realized during State fiscal year 2020 shall be reduced by 5%.
14    (b-5) Financially Distressed Cities Fund. The Department
15of Revenue shall certify to the Treasurer an amount equal to:
16        (1) the amount that would have been distributed under
17    subsection (a) of Section 2 of the State Revenue Sharing
18    Act to all financially distressed cities, as that term is
19    defined in Section 8-12-3 of the Illinois Municipal Code,
20    if the Treasurer had transferred under subsection (b) to
21    the Local Government Distributive Fund a sum calculated
22    using (i) 10% of the net revenue realized from the tax
23    imposed by subsections (a) and (b) of Section 201 of this
24    Act upon individuals, trusts, and estates during the
25    preceding month and (ii) 10% of the net revenue realized
26    from the tax imposed by subsections (a) and (b) of Section

 

 

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1    201 of this Act upon corporations during the preceding
2    month; and
3        (2) subtracting from the amount calculated under
4    paragraph (1) the amount distributed to all financially
5    distressed cities under subsection (a) of Section 2 of the
6    State Revenue Sharing Act during the current month.
7    Upon receipt of the certification from the Department of
8Revenue, the Treasurer shall order transferred and the
9Comptroller shall transfer from the General Revenue Fund to
10the Financially Distressed Cities Fund the amount shown on the
11certification.
12    If for any reason the aggregate appropriations made
13available are insufficient to meet the amount certified under
14this subsection, this subsection shall constitute a continuing
15appropriation of the amount certified. The General Assembly
16may appropriate lesser amounts by law.
17    (c) Deposits Into Income Tax Refund Fund.
18        (1) Beginning on January 1, 1989 and thereafter, the
19    Department shall deposit a percentage of the amounts
20    collected pursuant to subsections (a) and (b)(1), (2), and
21    (3) of Section 201 of this Act into a fund in the State
22    treasury known as the Income Tax Refund Fund. Beginning
23    with State fiscal year 1990 and for each fiscal year
24    thereafter, the percentage deposited into the Income Tax
25    Refund Fund during a fiscal year shall be the Annual
26    Percentage. For fiscal year 2011, the Annual Percentage

 

 

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1    shall be 8.75%. For fiscal year 2012, the Annual
2    Percentage shall be 8.75%. For fiscal year 2013, the
3    Annual Percentage shall be 9.75%. For fiscal year 2014,
4    the Annual Percentage shall be 9.5%. For fiscal year 2015,
5    the Annual Percentage shall be 10%. For fiscal year 2018,
6    the Annual Percentage shall be 9.8%. For fiscal year 2019,
7    the Annual Percentage shall be 9.7%. For fiscal year 2020,
8    the Annual Percentage shall be 9.5%. For fiscal year 2021,
9    the Annual Percentage shall be 9%. For all other fiscal
10    years, the Annual Percentage shall be calculated as a
11    fraction, the numerator of which shall be the amount of
12    refunds approved for payment by the Department during the
13    preceding fiscal year as a result of overpayment of tax
14    liability under subsections (a) and (b)(1), (2), and (3)
15    of Section 201 of this Act plus the amount of such refunds
16    remaining approved but unpaid at the end of the preceding
17    fiscal year, minus the amounts transferred into the Income
18    Tax Refund Fund from the Tobacco Settlement Recovery Fund,
19    and the denominator of which shall be the amounts which
20    will be collected pursuant to subsections (a) and (b)(1),
21    (2), and (3) of Section 201 of this Act during the
22    preceding fiscal year; except that in State fiscal year
23    2002, the Annual Percentage shall in no event exceed 7.6%.
24    The Director of Revenue shall certify the Annual
25    Percentage to the Comptroller on the last business day of
26    the fiscal year immediately preceding the fiscal year for

 

 

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1    which it is to be effective.
2        (2) Beginning on January 1, 1989 and thereafter, the
3    Department shall deposit a percentage of the amounts
4    collected pursuant to subsections (a) and (b)(6), (7), and
5    (8), (c) and (d) of Section 201 of this Act into a fund in
6    the State treasury known as the Income Tax Refund Fund.
7    Beginning with State fiscal year 1990 and for each fiscal
8    year thereafter, the percentage deposited into the Income
9    Tax Refund Fund during a fiscal year shall be the Annual
10    Percentage. For fiscal year 2011, the Annual Percentage
11    shall be 17.5%. For fiscal year 2012, the Annual
12    Percentage shall be 17.5%. For fiscal year 2013, the
13    Annual Percentage shall be 14%. For fiscal year 2014, the
14    Annual Percentage shall be 13.4%. For fiscal year 2015,
15    the Annual Percentage shall be 14%. For fiscal year 2018,
16    the Annual Percentage shall be 17.5%. For fiscal year
17    2019, the Annual Percentage shall be 15.5%. For fiscal
18    year 2020, the Annual Percentage shall be 14.25%. For
19    fiscal year 2021, the Annual Percentage shall be 14%. For
20    all other fiscal years, the Annual Percentage shall be
21    calculated as a fraction, the numerator of which shall be
22    the amount of refunds approved for payment by the
23    Department during the preceding fiscal year as a result of
24    overpayment of tax liability under subsections (a) and
25    (b)(6), (7), and (8), (c) and (d) of Section 201 of this
26    Act plus the amount of such refunds remaining approved but

 

 

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1    unpaid at the end of the preceding fiscal year, and the
2    denominator of which shall be the amounts which will be
3    collected pursuant to subsections (a) and (b)(6), (7), and
4    (8), (c) and (d) of Section 201 of this Act during the
5    preceding fiscal year; except that in State fiscal year
6    2002, the Annual Percentage shall in no event exceed 23%.
7    The Director of Revenue shall certify the Annual
8    Percentage to the Comptroller on the last business day of
9    the fiscal year immediately preceding the fiscal year for
10    which it is to be effective.
11        (3) The Comptroller shall order transferred and the
12    Treasurer shall transfer from the Tobacco Settlement
13    Recovery Fund to the Income Tax Refund Fund (i)
14    $35,000,000 in January, 2001, (ii) $35,000,000 in January,
15    2002, and (iii) $35,000,000 in January, 2003.
16    (d) Expenditures from Income Tax Refund Fund.
17        (1) Beginning January 1, 1989, money in the Income Tax
18    Refund Fund shall be expended exclusively for the purpose
19    of paying refunds resulting from overpayment of tax
20    liability under Section 201 of this Act and for making
21    transfers pursuant to this subsection (d).
22        (2) The Director shall order payment of refunds
23    resulting from overpayment of tax liability under Section
24    201 of this Act from the Income Tax Refund Fund only to the
25    extent that amounts collected pursuant to Section 201 of
26    this Act and transfers pursuant to this subsection (d) and

 

 

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

 

 

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1        (4.5) As soon as possible after the end of fiscal year
2    1999 and of each fiscal year thereafter, the Director
3    shall order transferred and the State Treasurer and State
4    Comptroller shall transfer from the Income Tax Refund Fund
5    to the General Revenue Fund any surplus remaining in the
6    Income Tax Refund Fund as of the end of such fiscal year;
7    excluding for fiscal years 2000, 2001, and 2002 amounts
8    attributable to transfers under item (3) of subsection (c)
9    less refunds resulting from the earned income tax credit.
10        (5) This Act shall constitute an irrevocable and
11    continuing appropriation from the Income Tax Refund Fund
12    for the purpose of paying refunds upon the order of the
13    Director in accordance with the provisions of this
14    Section.
15    (e) Deposits into the Education Assistance Fund and the
16Income Tax Surcharge Local Government Distributive Fund. On
17July 1, 1991, and thereafter, of the amounts collected
18pursuant to subsections (a) and (b) of Section 201 of this Act,
19minus deposits into the Income Tax Refund Fund, the Department
20shall deposit 7.3% into the Education Assistance Fund in the
21State Treasury. Beginning July 1, 1991, and continuing through
22January 31, 1993, of the amounts collected pursuant to
23subsections (a) and (b) of Section 201 of the Illinois Income
24Tax Act, minus deposits into the Income Tax Refund Fund, the
25Department shall deposit 3.0% into the Income Tax Surcharge
26Local Government Distributive Fund in the State Treasury.

 

 

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1Beginning February 1, 1993 and continuing through June 30,
21993, of the amounts collected pursuant to subsections (a) and
3(b) of Section 201 of the Illinois Income Tax Act, minus
4deposits into the Income Tax Refund Fund, the Department shall
5deposit 4.4% into the Income Tax Surcharge Local Government
6Distributive Fund in the State Treasury. Beginning July 1,
71993, and continuing through June 30, 1994, of the amounts
8collected under subsections (a) and (b) of Section 201 of this
9Act, minus deposits into the Income Tax Refund Fund, the
10Department shall deposit 1.475% into the Income Tax Surcharge
11Local Government Distributive Fund in the State Treasury.
12    (f) Deposits into the Fund for the Advancement of
13Education. Beginning February 1, 2015, the Department shall
14deposit the following portions of the revenue realized from
15the tax imposed upon individuals, trusts, and estates by
16subsections (a) and (b) of Section 201 of this Act, minus
17deposits into the Income Tax Refund Fund, into the Fund for the
18Advancement of Education:
19        (1) beginning February 1, 2015, and prior to February
20    1, 2025, 1/30; and
21        (2) beginning February 1, 2025, 1/26.
22    If the rate of tax imposed by subsection (a) and (b) of
23Section 201 is reduced pursuant to Section 201.5 of this Act,
24the Department shall not make the deposits required by this
25subsection (f) on or after the effective date of the
26reduction.

 

 

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

 

 

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1cash receipts.
2(Source: P.A. 100-22, eff. 7-6-17; 100-23, eff. 7-6-17;
3100-587, eff. 6-4-18; 100-621, eff. 7-20-18; 100-863, eff.
48-14-18; 100-1171, eff. 1-4-19; 101-10, eff. 6-5-19; 101-81,
5eff. 7-12-19; 101-636, eff. 6-10-20.)
 
6    (Text of Section with the changes made by P.A. 101-8,
7which did not take effect (see Section 99 of P.A. 101-8))
8    Sec. 901. Collection authority.
9    (a) In general. The Department shall collect the taxes
10imposed by this Act. The Department shall collect certified
11past due child support amounts under Section 2505-650 of the
12Department of Revenue Law of the Civil Administrative Code of
13Illinois. Except as provided in subsections (b), (c), (e),
14(f), (g), and (h) of this Section, money collected pursuant to
15subsections (a) and (b) of Section 201 of this Act shall be
16paid into the General Revenue Fund in the State treasury;
17money collected pursuant to subsections (c) and (d) of Section
18201 of this Act shall be paid into the Personal Property Tax
19Replacement Fund, a special fund in the State Treasury; and
20money collected under Section 2505-650 of the Department of
21Revenue Law of the Civil Administrative Code of Illinois shall
22be paid into the Child Support Enforcement Trust Fund, a
23special fund outside the State Treasury, or to the State
24Disbursement Unit established under Section 10-26 of the
25Illinois Public Aid Code, as directed by the Department of

 

 

SB2413- 17 -LRB102 11630 AWJ 16964 b

1Healthcare and Family Services.
2    (b) Local Government Distributive Fund. Beginning August
31, 2017 and continuing through January 31, 2021, the Treasurer
4shall transfer each month from the General Revenue Fund to the
5Local Government Distributive Fund an amount equal to the sum
6of (i) 6.06% (10% of the ratio of the 3% individual income tax
7rate prior to 2011 to the 4.95% individual income tax rate
8after July 1, 2017) of the net revenue realized from the tax
9imposed by subsections (a) and (b) of Section 201 of this Act
10upon individuals, trusts, and estates during the preceding
11month and (ii) 6.85% (10% of the ratio of the 4.8% corporate
12income tax rate prior to 2011 to the 7% corporate income tax
13rate after July 1, 2017) of the net revenue realized from the
14tax imposed by subsections (a) and (b) of Section 201 of this
15Act upon corporations during the preceding month. Beginning
16February 1, 2021, the Treasurer shall transfer each month from
17the General Revenue Fund to the Local Government Distributive
18Fund an amount equal to the sum of (i) 5.32% of the net revenue
19realized from the tax imposed by subsections (a) and (b) of
20Section 201 of this Act upon individuals, trusts, and estates
21during the preceding month and (ii) 6.16% of the net revenue
22realized from the tax imposed by subsections (a) and (b) of
23Section 201 of this Act upon corporations during the preceding
24month. Net revenue realized for a month shall be defined as the
25revenue from the tax imposed by subsections (a) and (b) of
26Section 201 of this Act which is deposited in the General

 

 

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1Revenue Fund, the Education Assistance Fund, the Income Tax
2Surcharge Local Government Distributive Fund, the Fund for the
3Advancement of Education, and the Commitment to Human Services
4Fund during the month minus the amount paid out of the General
5Revenue Fund in State warrants during that same month as
6refunds to taxpayers for overpayment of liability under the
7tax imposed by subsections (a) and (b) of Section 201 of this
8Act.
9    Notwithstanding any provision of law to the contrary,
10beginning on July 6, 2017 (the effective date of Public Act
11100-23), those amounts required under this subsection (b) to
12be transferred by the Treasurer into the Local Government
13Distributive Fund from the General Revenue Fund shall be
14directly deposited into the Local Government Distributive Fund
15as the revenue is realized from the tax imposed by subsections
16(a) and (b) of Section 201 of this Act.
17    For State fiscal year 2020 only, notwithstanding any
18provision of law to the contrary, the total amount of revenue
19and deposits under this Section attributable to revenues
20realized during State fiscal year 2020 shall be reduced by 5%.
21    (c) Deposits Into Income Tax Refund Fund.
22        (1) Beginning on January 1, 1989 and thereafter, the
23    Department shall deposit a percentage of the amounts
24    collected pursuant to subsections (a) and (b)(1), (2), and
25    (3) of Section 201 of this Act into a fund in the State
26    treasury known as the Income Tax Refund Fund. Beginning

 

 

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1    with State fiscal year 1990 and for each fiscal year
2    thereafter, the percentage deposited into the Income Tax
3    Refund Fund during a fiscal year shall be the Annual
4    Percentage. For fiscal year 2011, the Annual Percentage
5    shall be 8.75%. For fiscal year 2012, the Annual
6    Percentage shall be 8.75%. For fiscal year 2013, the
7    Annual Percentage shall be 9.75%. For fiscal year 2014,
8    the Annual Percentage shall be 9.5%. For fiscal year 2015,
9    the Annual Percentage shall be 10%. For fiscal year 2018,
10    the Annual Percentage shall be 9.8%. For fiscal year 2019,
11    the Annual Percentage shall be 9.7%. For fiscal year 2020,
12    the Annual Percentage shall be 9.5%. For fiscal year 2021,
13    the Annual Percentage shall be 9%. For all other fiscal
14    years, the Annual Percentage shall be calculated as a
15    fraction, the numerator of which shall be the amount of
16    refunds approved for payment by the Department during the
17    preceding fiscal year as a result of overpayment of tax
18    liability under subsections (a) and (b)(1), (2), and (3)
19    of Section 201 of this Act plus the amount of such refunds
20    remaining approved but unpaid at the end of the preceding
21    fiscal year, minus the amounts transferred into the Income
22    Tax Refund Fund from the Tobacco Settlement Recovery Fund,
23    and the denominator of which shall be the amounts which
24    will be collected pursuant to subsections (a) and (b)(1),
25    (2), and (3) of Section 201 of this Act during the
26    preceding fiscal year; except that in State fiscal year

 

 

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1    2002, the Annual Percentage shall in no event exceed 7.6%.
2    The Director of Revenue shall certify the Annual
3    Percentage to the Comptroller on the last business day of
4    the fiscal year immediately preceding the fiscal year for
5    which it is to be effective.
6        (2) Beginning on January 1, 1989 and thereafter, the
7    Department shall deposit a percentage of the amounts
8    collected pursuant to subsections (a) and (b)(6), (7), and
9    (8), (c) and (d) of Section 201 of this Act into a fund in
10    the State treasury known as the Income Tax Refund Fund.
11    Beginning with State fiscal year 1990 and for each fiscal
12    year thereafter, the percentage deposited into the Income
13    Tax Refund Fund during a fiscal year shall be the Annual
14    Percentage. For fiscal year 2011, the Annual Percentage
15    shall be 17.5%. For fiscal year 2012, the Annual
16    Percentage shall be 17.5%. For fiscal year 2013, the
17    Annual Percentage shall be 14%. For fiscal year 2014, the
18    Annual Percentage shall be 13.4%. For fiscal year 2015,
19    the Annual Percentage shall be 14%. For fiscal year 2018,
20    the Annual Percentage shall be 17.5%. For fiscal year
21    2019, the Annual Percentage shall be 15.5%. For fiscal
22    year 2020, the Annual Percentage shall be 14.25%. For
23    fiscal year 2021, the Annual Percentage shall be 14%. For
24    all other fiscal years, the Annual Percentage shall be
25    calculated as a fraction, the numerator of which shall be
26    the amount of refunds approved for payment by the

 

 

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1    Department during the preceding fiscal year as a result of
2    overpayment of tax liability under subsections (a) and
3    (b)(6), (7), and (8), (c) and (d) of Section 201 of this
4    Act plus the amount of such refunds remaining approved but
5    unpaid at the end of the preceding fiscal year, and the
6    denominator of which shall be the amounts which will be
7    collected pursuant to subsections (a) and (b)(6), (7), and
8    (8), (c) and (d) of Section 201 of this Act during the
9    preceding fiscal year; except that in State fiscal year
10    2002, the Annual Percentage shall in no event exceed 23%.
11    The Director of Revenue shall certify the Annual
12    Percentage to the Comptroller on the last business day of
13    the fiscal year immediately preceding the fiscal year for
14    which it is to be effective.
15        (3) The Comptroller shall order transferred and the
16    Treasurer shall transfer from the Tobacco Settlement
17    Recovery Fund to the Income Tax Refund Fund (i)
18    $35,000,000 in January, 2001, (ii) $35,000,000 in January,
19    2002, and (iii) $35,000,000 in January, 2003.
20    (d) Expenditures from Income Tax Refund Fund.
21        (1) Beginning January 1, 1989, money in the Income Tax
22    Refund Fund shall be expended exclusively for the purpose
23    of paying refunds resulting from overpayment of tax
24    liability under Section 201 of this Act and for making
25    transfers pursuant to this subsection (d).
26        (2) The Director shall order payment of refunds

 

 

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

 

 

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1    from the Income Tax Refund Fund during the fiscal year
2    over the amount collected pursuant to subsections (c) and
3    (d) of Section 201 of this Act deposited into the Income
4    Tax Refund Fund during the fiscal year.
5        (4.5) As soon as possible after the end of fiscal year
6    1999 and of each fiscal year thereafter, the Director
7    shall order transferred and the State Treasurer and State
8    Comptroller shall transfer from the Income Tax Refund Fund
9    to the General Revenue Fund any surplus remaining in the
10    Income Tax Refund Fund as of the end of such fiscal year;
11    excluding for fiscal years 2000, 2001, and 2002 amounts
12    attributable to transfers under item (3) of subsection (c)
13    less refunds resulting from the earned income tax credit.
14        (5) This Act shall constitute an irrevocable and
15    continuing appropriation from the Income Tax Refund Fund
16    for the purpose of paying refunds upon the order of the
17    Director in accordance with the provisions of this
18    Section.
19    (e) Deposits into the Education Assistance Fund and the
20Income Tax Surcharge Local Government Distributive Fund. On
21July 1, 1991, and thereafter, of the amounts collected
22pursuant to subsections (a) and (b) of Section 201 of this Act,
23minus deposits into the Income Tax Refund Fund, the Department
24shall deposit 7.3% into the Education Assistance Fund in the
25State Treasury. Beginning July 1, 1991, and continuing through
26January 31, 1993, of the amounts collected pursuant to

 

 

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1subsections (a) and (b) of Section 201 of the Illinois Income
2Tax Act, minus deposits into the Income Tax Refund Fund, the
3Department shall deposit 3.0% into the Income Tax Surcharge
4Local Government Distributive Fund in the State Treasury.
5Beginning February 1, 1993 and continuing through June 30,
61993, of the amounts collected pursuant to subsections (a) and
7(b) of Section 201 of the Illinois Income Tax Act, minus
8deposits into the Income Tax Refund Fund, the Department shall
9deposit 4.4% into the Income Tax Surcharge Local Government
10Distributive Fund in the State Treasury. Beginning July 1,
111993, and continuing through June 30, 1994, of the amounts
12collected under subsections (a) and (b) of Section 201 of this
13Act, minus deposits into the Income Tax Refund Fund, the
14Department shall deposit 1.475% into the Income Tax Surcharge
15Local Government Distributive Fund in the State Treasury.
16    (f) Deposits into the Fund for the Advancement of
17Education. Beginning February 1, 2015, the Department shall
18deposit the following portions of the revenue realized from
19the tax imposed upon individuals, trusts, and estates by
20subsections (a) and (b) of Section 201 of this Act, minus
21deposits into the Income Tax Refund Fund, into the Fund for the
22Advancement of Education:
23        (1) beginning February 1, 2015, and prior to February
24    1, 2025, 1/30; and
25        (2) beginning February 1, 2025, 1/26.
26    If the rate of tax imposed by subsection (a) and (b) of

 

 

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

 

 

SB2413- 26 -LRB102 11630 AWJ 16964 b

1the cash receipts collected during the preceding fiscal year
2by the Audit Bureau of the Department from the tax imposed by
3subsections (a), (b), (c), and (d) of Section 201 of this Act,
4net of deposits into the Income Tax Refund Fund made from those
5cash receipts.
6(Source: P.A. 100-22, eff. 7-6-17; 100-23, eff. 7-6-17;
7100-587, eff. 6-4-18; 100-621, eff. 7-20-18; 100-863, eff.
88-14-18; 100-1171, eff. 1-4-19; 101-8, see Section 99 for
9effective date; 101-10, eff. 6-5-19; 101-81, eff. 7-12-19;
10101-636, eff. 6-10-20.)
 
11    Section 20. The Illinois Municipal Code is amended by
12changing Sections 8-12-3, 8-12-4, 8-12-10, 8-12-18, and
138-12-24 as follows:
 
14    (65 ILCS 5/8-12-3)  (from Ch. 24, par. 8-12-3)
15    Sec. 8-12-3. As used in this Division:
16    (1) "Authority" means the "(Name of Financially Distressed
17City) Financial Advisory Authority".
18    (2) "Financially distressed city" means any municipality
19which: is a home rule unit and which (i) is a home rule unit
20certified by the Department of Revenue as being in the highest
215% of all home rule municipalities in terms of the aggregate of
22the rate per cent of all taxes levied pursuant to statute or
23ordinance upon all taxable property of the municipality and as
24being in the lowest 5% of all home rule municipalities in terms

 

 

SB2413- 27 -LRB102 11630 AWJ 16964 b

1of per capita tax yield, or is a non-home rule unit certified
2by the Department of Revenue as being in the highest 5% of all
3non-home rule municipalities in terms of the aggregate of the
4rate per cent of all taxes levied pursuant to statute or
5ordinance upon all taxable property of the municipality and as
6being in the lowest 5% of all non-home rule municipalities in
7terms of per capita tax yield; and (ii) is designated by joint
8resolution of the General Assembly as a financially distressed
9city.
10    (3) "Home rule municipality" means a municipality which is
11a home rule unit as provided in Section 6 of Article VII of the
12Illinois Constitution.
13    (4) "Budget" means an annual appropriation ordinance or
14annual budget as described in Division 2 of Article 8, as from
15time to time in effect in the financially distressed city.
16    (5) "Chairperson" means the chairperson of the Authority
17appointed pursuant to Section 8-12-7.
18    (6) "Financial Plan" means the financially distressed
19city's financial plan as developed pursuant to Section
208-12-15, as from time to time in effect.
21    (7) "Fiscal year" means the fiscal year of the financially
22distressed city.
23    (8) "Obligations" means bonds, notes or other evidence of
24indebtedness issued by the Illinois Finance Authority in
25connection with the provision of financial aid to a
26financially distressed city pursuant to this Division and

 

 

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1applicable provisions of the Illinois Finance Authority Act.
2(Source: P.A. 93-205, eff. 1-1-04.)
 
3    (65 ILCS 5/8-12-4)  (from Ch. 24, par. 8-12-4)
4    Sec. 8-12-4. In order to receive assistance as provided in
5this Division, a home rule municipality shall first, by
6ordinance passed by its corporate authorities, request (i)
7that the Department of Revenue certify that it is in the
8highest 5% of all home rule or non-home rule municipalities,
9respectively, in terms of the aggregate of the rate per cent of
10all taxes levied pursuant to statute or ordinance upon all
11taxable property of the municipality and in the lowest 5% of
12all home rule or non-home rule municipalities, respectively,
13in terms of per capita tax yield, and (ii) that the General
14Assembly by joint resolution designate it as a financially
15distressed city. A home rule municipality which is so
16certified and designated as a financially distressed city and
17which desires to receive assistance as provided in this
18Division shall, by ordinance passed by its corporate
19authorities, request that a financial advisory authority be
20appointed for the municipality and that the municipality city
21and that the city receive assistance as provided in this
22Division, and shall file a certified copy of that ordinance
23with the Governor, with the Clerk of the House of
24Representatives and with the Secretary of the Senate. Upon the
25filing of the certified copies of that ordinance as required

 

 

SB2413- 29 -LRB102 11630 AWJ 16964 b

1by this Section this Division and all of its provisions shall
2then and thereafter be applicable to the financially
3distressed city, shall govern and control its financial
4accounting, budgeting and taxing procedures and practices,
5and, subject to the limitations of subsection (a) of Section
68-12-22, shall remain in full force and effect with respect
7thereto until such time as the financial advisory authority
8established under Section 8-12-5 is abolished as provided in
9subsection (c) of Section 8-12-22.
10(Source: P.A. 86-1211.)
 
11    (65 ILCS 5/8-12-10)  (from Ch. 24, par. 8-12-10)
12    Sec. 8-12-10. Any State agency or unit of local
13government, within its respective function, may render such
14services and technical assistance to the Authority as the
15Authority may request. Upon the Authority's request any such
16agency or unit of local government may transfer to the
17Authority such officers and employees as the Authority and any
18such agency or unit of local government deem necessary to
19carry out the Authority's functions and duties. Officers and
20employees so transferred shall not lose or forfeit their
21employment status or rights.
22(Source: P.A. 86-1211.)
 
23    (65 ILCS 5/8-12-18)  (from Ch. 24, par. 8-12-18)
24    Sec. 8-12-18. (a) The financially distressed city shall

 

 

SB2413- 30 -LRB102 11630 AWJ 16964 b

1meet its debt service obligations as they become due. No other
2expenditure shall be made by the city unless it is consistent
3with the Financial Plan and Budget in effect. The State shall
4not reduce revenues or impose additional costs affecting the
5financially distressed city, including, but not limited to,
6the revenue offsets authorized under Sections 3-125, 4-118, or
77-172.1 of the Illinois Pension Code or deductions from
8warrants under Section 10.05 of the State Comptroller Act
9unless it is consistent with the Financial Plan and Budget in
10effect. This subsection does not limit the Department of
11Revenue's authority to reduce revenues to correct an error.
12    (b) State mandates enacted while a municipality is
13designated as a financially distressed city that would cause
14the municipality to incur additional costs are not valid or
15enforceable against the municipality during the period when
16the municipality is under the financially distressed city
17designation.
18(Source: P.A. 86-1211.)
 
19    (65 ILCS 5/8-12-24)  (from Ch. 24, par. 8-12-24)
20    Sec. 8-12-24. A municipality home rule unit which is a
21financially distressed city to which this Division is
22applicable as provided in Section 8-12-4 may not employ
23financial or fiscal accounting or budgetary procedures or
24systems, nor place into effect any Financial Plan or Budget,
25nor enter into any contract or make any expenditure, nor

 

 

SB2413- 31 -LRB102 11630 AWJ 16964 b

1otherwise conduct its financial and fiscal affairs or take
2other action in a manner inconsistent with the provisions of
3this Division, until such time as the powers and
4responsibilities of the Authority are terminated as provided
5in Section 8-12-22. This Section is a limitation under
6subsection (i) of Section 6 of Article VII of the Illinois
7Constitution on the concurrent exercise by home rule units
8which are financially distressed cities to which this Division
9is applicable as provided in Section 8-12-4 of powers and
10functions exercised by the State.
11(Source: P.A. 86-1211.)
 
12    Section 99. Effective date. This Act takes effect January
131, 2022.

 

 

SB2413- 32 -LRB102 11630 AWJ 16964 b

1 INDEX
2 Statutes amended in order of appearance
3    30 ILCS 105/5.935 new
4    30 ILCS 115/2from Ch. 85, par. 612
5    35 ILCS 5/901
6    65 ILCS 5/8-12-3from Ch. 24, par. 8-12-3
7    65 ILCS 5/8-12-4from Ch. 24, par. 8-12-4
8    65 ILCS 5/8-12-10from Ch. 24, par. 8-12-10
9    65 ILCS 5/8-12-18from Ch. 24, par. 8-12-18
10    65 ILCS 5/8-12-24from Ch. 24, par. 8-12-24