70 ILCS 2805/37
Whenever any territory contained within a sanitary district created under this Act is annexed to any municipality, the sanitary district shall remain responsible for providing sewers and collecting and disposing of sewage in such territory annexed to the municipality and, if the sanitary district is operating a water supply system in such territory at the time of such annexation, the sanitary district shall remain responsible for supplying water in such territory. The municipality to which any territory contained within a sanitary district is annexed shall not, because of such annexation, become responsible for any obligations, or part thereof, of any sanitary district in which such territory is also contained. The fact that territory in a sanitary district is annexed to a municipality shall not affect any obligations, contracts or duties existing between the sanitary district and the municipality at the time of such annexation.
Where, however, the territory within any sanitary district created under this Act becomes wholly included in one or more municipalities and no part of that territory is in an unincorporated area, any 50 electors residing within the sanitary district may file, within 6 months after being wholly included in one or more municipalities, with the circuit clerk of the county where the district is located, a petition to submit a public question to referendum on whether the sanitary district shall be dissolved. Upon filing the petition with the clerk, the circuit court shall certify the question to the proper election officials who shall submit the question at an election in accordance with the general election law. Notice of the referendum shall be given, and the referendum shall be conducted, in the manner provided by the general election law.
The question shall be in substantially the following form:
"Shall (name of sanitary district) be dissolved?" The votes shall be recorded as "Yes" or "No".
If a majority of the votes cast on this question are not in favor of dissolution of the sanitary district, the sanitary district shall continue in operation.
If a majority of the votes cast on this question are in favor of dissolution, then the district is dissolved.
If no petition for referendum is filed with the circuit clerk within that 6-month period, then that sanitary district is dissolved by operation of law at the end of that 6-month period. In that event, each of the municipalities within which the territory of that district is located (a) shall be responsible for providing sewers for collecting and disposing of sewage and, if a water supply system was operated by the sanitary district, for supplying water in the part of the district's territory situated within the municipal corporate limits; and (b) shall be liable for that part of any revenue bonded indebtedness of the district outstanding at the time of its dissolution that is in the same proportion of the total outstanding revenue bonded indebtedness as the territory of the district included in that municipality is of the total territory in the district. The general obligation indebtedness of the dissolved district shall be paid from the proceeds of continuing taxes and special assessments as provided in Section 35. The corporate authorities of the municipalities affected shall agree as to the distribution of any personal property of the sanitary district.
The corporate authorities of any municipality required to provide sewer or water service under this Section may levy and collect for that purpose a tax upon the taxable property within that municipality, the aggregate amount of which for each year may not exceed .25% of the value of such property as equalized or assessed by the Department of Revenue and that tax shall be in addition to taxes authorized to be levied for the general corporate purposes of the municipality.
If any tax has been levied for sewer and water purposes after October 14, 1969 and before the effective date of this amendatory Act by a municipality which would have power to levy such a tax under this amendatory Act, that tax is expressly validated.
70 ILCS 2805/37