Several bills introduced during the first few months of the Illinois Legislature’s 97^th General Assembly would limit the availability of TIF Funds for development projects.  While these Bills are in the early stages of consideration, they could seriously affect the usefulness of TIF in Illinois.

The following Bills would limit the availability of taxes levied by school districts:

• House Bill 1207/Senate Bill 1626.  If adopted, these bills would require that the portion of taxes levied by a school district in a redevelopment project area established by the City of Chicago be allocated to the school district rather than deposited in the Special Tax Allocation Fund of the TIF District.  This would result in a reduction of more than half of the available TIF funds to projects in newly created redevelopment areas in the City of Chicago.

• House Bill 1234.  If adopted, this bill would require any portion of taxes levied by a school district or school districts located in a redevelopment project area be paid to the school district rather than deposited in the Special Tax Allocation Fund if tax increment financing has not been adopted in the redevelopment project area within 3 years of the area’s designation.

The following bills would limit the availability of TIF funds generally:

• House Bill 1208/Senate Bill 1620.  These two pieces of legislation would require that any TIF revenues not specifically allocated to defined project costs within a redevelopment project area at the end of a municipality’s fiscal year be considered “surplus funds.”  Under existing TIF law, surplus funds must be distributed to overlapping taxing bodies, however under existing law, the amount of surplus funds is typically determined at the end of the life of the TIF district rather than on an annual basis.

• House Bill 1575. This bill would permit any taxing district to opt out of a redevelopment project area, which means that its taxes would not be deposited in the Special Tax Allocation Fund but would be paid to that taxing district.  This bill would also require all redevelopment project areas to be approved by each county board and the governing authorities of all overlapping taxing districts that do not elect to opt out of the redevelopment project.

As of March 16^th, all of these bills have been assigned to various House and Senate Committees for further review and debate.

This entry was posted on Thursday, March 17th, 2011 at 6:01 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.