50 ILCS 470/30

Current through Public Act 103-1056

Section 50 ILCS 470/30 - STAR bonds; source of payment

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

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

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

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

(3) STAR bond occupation taxes created pursuant to Section 31 and designated as pledged STAR revenues by the political subdivision;

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

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

(6) all of the State sales tax increment;

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

(8) any combination of these methods.

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

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

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

(e) There is created in the State treasury a special fund to be known as the STAR Bonds Revenue Fund. As soon as possible after the first day of each month, beginning January 1, 2011, upon certification of the Department of Revenue, the Comptroller shall order transferred, and the Treasurer shall transfer, from the General Revenue Fund to the STAR Bonds Revenue Fund the State sales tax increment for the second preceding month, less 3% of that amount, which shall be transferred into the Tax Compliance and Administration Fund and shall be used by the Department, subject to appropriation, to cover the costs of the Department in administering the Innovation Development and Economy Act. As soon as possible after the first day of each month, beginning January 1, 2011, upon certification of the Department of Revenue, the Comptroller shall order transferred, and the Treasurer shall transfer, from the Local Government Tax Fund to the STAR Bonds Revenue Fund the local sales tax increment for the second preceding month, as provided in Section 6z-18 of the State Finance Act and from the County and Mass Transit District Fund to the STAR Bonds Revenue Fund the local sales tax increment for the second preceding month, as provided in Section 6z-20 of the State Finance Act.

On or before the 25th day of each calendar month, beginning on January 1, 2011, the Department shall prepare and certify to the Comptroller the disbursement of stated sums of money out of the STAR Bonds Revenue Fund to named municipalities and counties, the municipalities and counties to be those entitled to distribution of taxes or penalties paid to the Department during the second preceding calendar month. The amount to be paid to each municipality or county shall be the amount of the State sales tax increment and the local sales tax increment (not including credit memoranda or the amount transferred into the Tax Compliance and Administration Fund) collected during the second preceding calendar month by the Department from retailers and servicemen on transactions at places of business located within a STAR bond district in that municipality or county, plus an amount the Department determines is necessary to offset any amounts which were erroneously paid to a different taxing body, and not including an amount equal to the amount of refunds made during the second preceding calendar month by the Department, and not including any amount which the Department determines is necessary to offset any amounts which are payable to a different taxing body but were erroneously paid to the municipality or county. Within 10 days after receipt, by the Comptroller, of the disbursement certification to the municipalities and counties, provided for in this Section to be given to the Comptroller by the Department, the Comptroller shall cause the orders to be drawn for the respective amounts in accordance with the directions contained in such certification.

When certifying the amount of monthly disbursement to a municipality or county under this subsection, the Department shall increase or decrease that amount by an amount necessary to offset any misallocation of previous disbursements. The offset amount shall be the amount erroneously disbursed within the 6 months preceding the time a misallocation is discovered.

The corporate authorities of the political subdivision shall deposit the proceeds for the STAR Bonds Revenue Fund into a special fund of the political subdivision called the "(Name of political subdivision) STAR Bond District Revenue Fund" for the purpose of paying or reimbursing STAR bond project costs and obligations incurred in the payment of those costs.

If the political subdivision fails to issue STAR bonds within 180 days after the first distribution to the political subdivision from the STAR Bonds Revenue Fund, the Department of Revenue shall cease distribution of the State sales tax increment to the political subdivision, shall transfer any State sales tax increment in the STAR Bonds Revenue Fund to the General Revenue Fund, and shall cease deposits of State sales tax increment amounts into the STAR Bonds Revenue Fund. The political subdivision shall repay all of the State sales tax increment distributed to the political subdivision to date, which amounts shall be deposited into the General Revenue Fund. If not repaid within 90 days after notice from the State, the Department of Revenue shall withhold distributions to the political subdivision from the Local Government Tax Fund until the excess amount is repaid, which withheld amounts shall be transferred to the General Revenue Fund. At such time as the political subdivision notifies the Department of Revenue in writing that it has issued STAR Bonds in accordance with this Act and provides the Department with a copy of the political subdivision's official statement, bond purchase agreements, indenture, or other evidence of bond sale, the Department of Revenue shall resume deposits of the State sales tax increment into the STAR Bonds Revenue Fund and distribution of the State sales tax increment to the political subdivision in accordance with this Section.

(f) As of the seventh anniversary of the first date of distribution of State sales tax revenues from the first STAR bond project in the STAR bond district, and as of every fifth anniversary thereafter until final maturity of all STAR bonds issued in a STAR bond district, the portion of the aggregate proceeds of STAR bonds issued to date that is derived from the State sales tax increment pledged to pay STAR bonds in any STAR bond district shall not exceed 50% of the total development costs in the STAR bond district to date. The Illinois Auditor General shall make the foregoing determination on said seventh anniversary and every 5 years thereafter until final maturity of all STAR bonds issued in a STAR bond district. If at any time after the seventh anniversary of the first date of distribution of State sales tax revenues from the first STAR bond project in the STAR bond district the Illinois Auditor General determines that the portion of the aggregate proceeds of STAR bonds issued to date that is derived from the State sales tax increment pledged to pay STAR bonds in any STAR bond district has exceeded 50% of the total development costs in the STAR bond district, no additional STAR bonds may be issued in the STAR bond district until the percentage is reduced to 50% or below. When the percentage has been reduced to 50% or below, the master developer shall have the right, at its own cost, to obtain a new audit prepared by an independent third-party auditor verifying compliance and shall provide such audit to the Illinois Auditor General for review and approval. Upon the Illinois Auditor General's determination from the audit that the percentage has been reduced to 50% or below, STAR bonds may again be issued in the STAR bond district.

(g) Notwithstanding the provisions of the Tax Increment Allocation Redevelopment Act, if any portion of property taxes attributable to the increase in equalized assessed value within a STAR bond district are, at the time of formation of the STAR bond district, already subject to tax increment financing under the Tax Increment Allocation Redevelopment Act, then the tax increment for such portion shall be frozen at the base year established in accordance with this Act, and all future incremental increases over the base year shall not be subject to tax increment financing under the Tax Increment Allocation Redevelopment Act. Any party otherwise entitled to receipt of incremental tax revenues through an existing tax increment financing district shall be entitled to continue to receive such revenues up to the amount frozen in the base year. Nothing in this Act shall affect the prior qualification of existing redevelopment project costs incurred that are eligible for reimbursement under the Tax Increment Allocation Redevelopment Act. In such event, prior to approving a STAR bond district, the political subdivision forming the STAR bond district shall take such action as is necessary, including amending the existing tax increment financing district redevelopment plan, to carry out the provisions of this Act.

50 ILCS 470/30

Amended by P.A. 103-0008,§ 5-89, eff. 6/7/2023.

Added by P.A. 096-0939,§ 30, eff. 6/24/2010.