MUNI CD-TIF SURPLUS FUNDS

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104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
SB1432

Introduced 1/31/2025, by Sen. Laura M. Murphy

SYNOPSIS AS INTRODUCED:

65 ILCS 5/11-74.4-7

from Ch. 24, par. 11-74.4-7

Amends the Tax Increment Allocation Redevelopment Act of the Illinois
Municipal Code. Provides that all surplus funds in the special tax
allocation fund shall be distributed as soon as possible after they are
calculated (rather than distributed annually within 180 days after the
close of the municipality's fiscal year).
LRB104 08034 RTM 18080 b

A BILL FOR

SB1432
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1

AN ACT concerning local government.

2

Be it enacted by the People of the State of Illinois,
3
represented in the General Assembly:

4

Section 5.
The Illinois Municipal Code is amended by
5
changing Section 11-74.4-7 as follows:

6

(65 ILCS 5/11-74.4-7)

(from Ch. 24, par. 11-74.4-7)
7

Sec. 11-74.4-7.
Obligations secured by the special tax
8
allocation fund set forth in Section 11-74.4-8 for the
9
redevelopment project area may be issued to provide for
10
redevelopment project costs. Such obligations, when so issued,
11
shall be retired in the manner provided in the ordinance
12
authorizing the issuance of such obligations by the receipts
13
of taxes levied as specified in Section 11-74.4-9 against the
14
taxable property included in the area, by revenues as
15
specified by Section 11-74.4-8a and other revenue designated
16
by the municipality. A municipality may in the ordinance
17
pledge all or any part of the funds in and to be deposited in
18
the special tax allocation fund created pursuant to Section
19
11-74.4-8 to the payment of the redevelopment project costs
20
and obligations. Any pledge of funds in the special tax
21
allocation fund shall provide for distribution to the taxing
22
districts and to the Illinois Department of Revenue of moneys
23
not required, pledged, earmarked, or otherwise designated for

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payment and securing of the obligations and anticipated
2
redevelopment project costs and such excess funds shall be
3
calculated annually and deemed to be "surplus" funds. In the
4
event a municipality only applies or pledges a portion of the
5
funds in the special tax allocation fund for the payment or
6
securing of anticipated redevelopment project costs or of
7
obligations, any such funds remaining in the special tax
8
allocation fund after complying with the requirements of the
9
application or pledge, shall also be calculated annually and
10
deemed "surplus" funds. All surplus funds in the special tax
11
allocation fund shall be distributed
as soon as possible after
12
they are calculated under this Section

annually within 180
13
days after the close of the municipality's fiscal year
by
14
being paid by the municipal treasurer to the County Collector,
15
to the Department of Revenue and to the municipality in direct
16
proportion to the tax incremental revenue received as a result
17
of an increase in the equalized assessed value of property in
18
the redevelopment project area, tax incremental revenue
19
received from the State and tax incremental revenue received
20
from the municipality, but not to exceed as to each such source
21
the total incremental revenue received from that source. The
22
County Collector shall thereafter make distribution to the
23
respective taxing districts in the same manner and proportion
24
as the most recent distribution by the county collector to the
25
affected districts of real property taxes from real property
26
in the redevelopment project area.

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Without limiting the foregoing in this Section, the
2
municipality may in addition to obligations secured by the
3
special tax allocation fund pledge for a period not greater
4
than the term of the obligations towards payment of such
5
obligations any part or any combination of the following: (a)
6
net revenues of all or part of any redevelopment project; (b)
7
taxes levied and collected on any or all property in the
8
municipality; (c) the full faith and credit of the
9
municipality; (d) a mortgage on part or all of the
10
redevelopment project; (d-5) repayment of bonds issued
11
pursuant to subsection (p-130) of Section 19-1 of the School
12
Code; or (e) any other taxes or anticipated receipts that the
13
municipality may lawfully pledge.
14

Such obligations may be issued in one or more series
15
bearing interest at such rate or rates as the corporate
16
authorities of the municipality shall determine by ordinance.
17
Such obligations shall bear such date or dates, mature at such
18
time or times not exceeding 20 years from their respective
19
dates, be in such denomination, carry such registration
20
privileges, be executed in such manner, be payable in such
21
medium of payment at such place or places, contain such
22
covenants, terms and conditions, and be subject to redemption
23
as such ordinance shall provide. Obligations issued pursuant
24
to this Act may be sold at public or private sale at such price
25
as shall be determined by the corporate authorities of the
26
municipalities. No referendum approval of the electors shall

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be required as a condition to the issuance of obligations
2
pursuant to this Division except as provided in this Section.
3

In the event the municipality authorizes issuance of
4
obligations pursuant to the authority of this Division secured
5
by the full faith and credit of the municipality, which
6
obligations are other than obligations which may be issued
7
under home rule powers provided by Article VII, Section 6 of
8
the Illinois Constitution, or pledges taxes pursuant to (b) or
9
(c) of the second paragraph of this section, the ordinance
10
authorizing the issuance of such obligations or pledging such
11
taxes shall be published within 10 days after such ordinance
12
has been passed in one or more newspapers, with general
13
circulation within such municipality. The publication of the
14
ordinance shall be accompanied by a notice of (1) the specific
15
number of voters required to sign a petition requesting the
16
question of the issuance of such obligations or pledging taxes
17
to be submitted to the electors; (2) the time in which such
18
petition must be filed; and (3) the date of the prospective
19
referendum. The municipal clerk shall provide a petition form
20
to any individual requesting one.
21

If no petition is filed with the municipal clerk, as
22
hereinafter provided in this Section, within 30 days after the
23
publication of the ordinance, the ordinance shall be in
24
effect. But, if within that 30 day period a petition is filed
25
with the municipal clerk, signed by electors in the
26
municipality numbering 10% or more of the number of registered

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voters in the municipality, asking that the question of
2
issuing obligations using full faith and credit of the
3
municipality as security for the cost of paying for
4
redevelopment project costs, or of pledging taxes for the
5
payment of such obligations, or both, be submitted to the
6
electors of the municipality, the corporate authorities of the
7
municipality shall call a special election in the manner
8
provided by law to vote upon that question, or, if a general,
9
State or municipal election is to be held within a period of
10
not less than 30 or more than 90 days from the date such
11
petition is filed, shall submit the question at the next
12
general, State or municipal election. If it appears upon the
13
canvass of the election by the corporate authorities that a
14
majority of electors voting upon the question voted in favor
15
thereof, the ordinance shall be in effect, but if a majority of
16
the electors voting upon the question are not in favor
17
thereof, the ordinance shall not take effect.
18

The ordinance authorizing the obligations may provide that
19
the obligations shall contain a recital that they are issued
20
pursuant to this Division, which recital shall be conclusive
21
evidence of their validity and of the regularity of their
22
issuance.
23

In the event the municipality authorizes issuance of
24
obligations pursuant to this Section secured by the full faith
25
and credit of the municipality, the ordinance authorizing the
26
obligations may provide for the levy and collection of a

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1
direct annual tax upon all taxable property within the
2
municipality sufficient to pay the principal thereof and
3
interest thereon as it matures, which levy may be in addition
4
to and exclusive of the maximum of all other taxes authorized
5
to be levied by the municipality, which levy, however, shall
6
be abated to the extent that monies from other sources are
7
available for payment of the obligations and the municipality
8
certifies the amount of said monies available to the county
9
clerk.
10

A certified copy of such ordinance shall be filed with the
11
county clerk of each county in which any portion of the
12
municipality is situated, and shall constitute the authority
13
for the extension and collection of the taxes to be deposited
14
in the special tax allocation fund.
15

A municipality may also issue its obligations to refund in
16
whole or in part, obligations theretofore issued by such
17
municipality under the authority of this Act, whether at or
18
prior to maturity, provided however, that the last maturity of
19
the refunding obligations may not be later than the dates set
20
forth under Section 11-74.4-3.5.
21

In the event a municipality issues obligations under home
22
rule powers or other legislative authority the proceeds of
23
which are pledged to pay for redevelopment project costs, the
24
municipality may, if it has followed the procedures in
25
conformance with this division, retire said obligations from
26
funds in the special tax allocation fund in amounts and in such

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1
manner as if such obligations had been issued pursuant to the
2
provisions of this division.
3

All obligations heretofore or hereafter issued pursuant to
4
this Act shall not be regarded as indebtedness of the
5
municipality issuing such obligations or any other taxing
6
district for the purpose of any limitation imposed by law.
7
(Source: P.A. 100-531, eff. 9-22-17.)

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