Public Act 097-0188
 
SB1712 EnrolledLRB097 09992 RLJ 50162 b


  
    AN ACT concerning local government.
  
 
    Be it enacted by the People of the State of Illinois,
 
represented in the General Assembly:
  
 
 
    Section 5. The Innovation Development and Economy Act is 
amended by changing Section 10 as follows:
 
    (50 ILCS 470/10)

    Sec. 10. Definitions. As used in this Act, the following 
words and phrases shall have the following meanings unless a 
different meaning clearly appears from the context:
    "Base year" means the calendar year immediately prior to 
the calendar year in which the STAR bond district is 
established.

    "Commence work" means the manifest commencement of actual 
operations on the development site, such as, erecting a 
building, general on-site and off-site grading and utility 
installations, commencing design and construction 
documentation, ordering lead-time materials, excavating the 
ground to lay a foundation or a basement, or work of like 
description which a reasonable person would recognize as being 
done with the intention and purpose to continue work until the 
project is completed.

    "County" means the county in which a proposed STAR bond 
district is located.

    "De minimus" means an amount less than 15% of the land area 
within a STAR bond district.

    "Department of Revenue" means the Department of Revenue of 
the State of Illinois.

    "Destination user" means an owner, operator, licensee, 
co-developer, subdeveloper, or tenant (i) that operates a 
business within a STAR bond district that is a retail store 
having at least 150,000 square feet of sales floor area; (ii) 
that at the time of opening does not have another Illinois 
location within a 70 mile radius; (iii) that has an annual 
average of not less than 30% of customers who travel from at 
least 75 miles away or from out-of-state, as demonstrated by 
data from a comparable existing store or stores, or, if there 
is no comparable existing store, as demonstrated by an economic 
analysis that shows that the proposed retailer will have an 
annual average of not less than 30% of customers who travel 
from at least 75 miles away or from out-of-state; and (iv) that 
makes an initial capital investment, including project costs 
and other direct costs, of not less than $30,000,000 for such 
retail store.
    "Destination hotel" means a hotel (as that term is defined 
in Section 2 of the Hotel Operators' Occupation Tax Act) 
complex having at least 150 guest rooms and which also includes 
a venue for entertainment attractions, rides, or other 
activities oriented toward the entertainment and amusement of 
its guests and other patrons.
    "Developer" means any individual, corporation, trust, 
estate, partnership, limited liability partnership, limited 
liability company, or other entity. The term does not include a 
not-for-profit entity, political subdivision, or other agency 
or instrumentality of the State.

    "Director" means the Director of Revenue, who shall consult 
with the Director of Commerce and Economic Opportunity in any 
approvals or decisions required by the Director under this Act.

    "Economic impact study" means a study conducted by an 
independent economist to project the financial benefit of the 
proposed STAR bond project to the local, regional, and State 
economies, consider the proposed adverse impacts on similar 
projects and businesses, as well as municipalities within the 
projected market area, and draw conclusions about the net 
effect of the proposed STAR bond project on the local, 
regional, and State economies. A copy of the economic impact 
study shall be provided to the Director for review.
    "Eligible area" means any improved or vacant area that (i) 
is contiguous and is not, in the aggregate, less than 250 acres 
nor more than 500 acres which must include only parcels of real 
property directly and substantially benefited by the proposed 
STAR bond district plan, (ii) is adjacent to a federal 
interstate highway, (iii) is within one mile of 2 State 
highways, (iv) is within one mile of an entertainment user, or 
a major or minor league sports stadium or other similar 
entertainment venue that had an initial capital investment of 
at least $20,000,000, and (v) includes land that was previously 
surface or strip mined.  The area may be bisected by streets, 
highways, roads, alleys, railways, bike paths, streams, 
rivers, and other waterways and still be deemed contiguous.  In 
addition, in order to constitute an eligible area one of the 
following requirements must be satisfied and all of which are 
subject to the review and approval of the Director as provided 
in subsection (d) of Section 15:

        (a) the governing body of the political subdivision 
    shall have determined that the area meets the requirements 
    of a "blighted area" as defined under the Tax Increment 
    Allocation Redevelopment Act;
or
        (b) the governing body of the political subdivision 
    shall have determined that the area is a blighted area as 
    determined under the provisions of Section 11-74.3-5 of the 
    Illinois Municipal Code;
or
        (c) the governing body of the political subdivision 
    shall make the following findings:

            (i) that the vacant portions of the area have 
        remained vacant for at least one year, or that any 
        building located on a vacant portion of the property 
        was demolished within the last year and that the 
        building would have qualified under item (ii) of this 
        subsection;

            (ii) if portions of the area are currently 
        developed, that the use, condition, and character of 
        the buildings on the property are not consistent with 
        the purposes set forth in Section 5;

            (iii) that the STAR bond district is expected to 
        create or retain job opportunities within the 
        political subdivision;

            (iv) that the STAR bond district will serve to 
        further the development of adjacent areas;

            (v) that without the availability of STAR bonds, 
        the projects described in the STAR bond district plan 
        would not be possible;

            (vi) that the master developer meets high 
        standards of creditworthiness and financial strength 
        as demonstrated by one or more of the following: (i) 
        corporate debenture ratings of BBB or higher by 
        Standard & Poor's Corporation or Baa or higher by 
        Moody's Investors Service, Inc.; (ii) a letter from a 
        financial institution with assets of $10,000,000 or 
        more attesting to the financial strength of the master 
        developer; or (iii) specific evidence of equity 
        financing for not less than 10% of the estimated total 
        STAR bond project costs;

            (vii) that the STAR bond district will strengthen 
        the commercial sector of the political subdivision;

            (viii) that the STAR bond district will enhance the 
        tax base of the political subdivision; and

            (ix) that the formation of a STAR bond district is 
        in the best interest of the political subdivision.

    "Entertainment user" means an owner, operator, licensee, 
co-developer, subdeveloper, or tenant that operates a business 
within a STAR bond district that has a primary use of providing 
a venue for entertainment attractions, rides, or other 
activities oriented toward the entertainment and amusement of 
its patrons, occupies at least 20 acres of land in the STAR 
bond district, and makes an initial capital investment, 
including project costs and other direct and indirect costs, of 
not less than $25,000,000 for that venue.
    "Feasibility study" means a feasibility study as defined in 
subsection (b) of Section 20.

    "Infrastructure" means the public improvements and private 
improvements that serve the public purposes set forth in 
Section 5 of this Act and that benefit the STAR bond district 
or any STAR bond projects, including, but not limited to, 
streets, drives and driveways, traffic and directional signs 
and signals, parking lots and parking facilities, 
interchanges, highways, sidewalks, bridges, underpasses and 
overpasses, bike and walking trails, sanitary storm sewers and 
lift stations, drainage conduits, channels, levees, canals, 
storm water detention and retention facilities, utilities and 
utility connections, water mains and extensions, and street and 
parking lot lighting and connections.
    "Local sales taxes" means any locally imposed taxes 
received by a municipality, county, or other local governmental 
entity arising from sales by retailers and servicemen within a 
STAR bond district, including business district sales taxes and 
STAR bond occupation taxes, and that portion of the net revenue 
realized under the Retailers' Occupation Tax Act, the Use Tax 
Act, the Service Use Tax Act, and the Service Occupation Tax 
Act from transactions at places of business located within a 
STAR bond district that is deposited into the Local Government 
Tax Fund and the County and Mass Transit District Fund. For the 
purpose of this Act, "local sales taxes" does not include (i) 
any taxes authorized pursuant to the Local Mass Transit 
District Act or , the Metro-East Park and Recreation District 
Act, or the Flood Prevention District Act for so long as the 
applicable taxing district does not impose a tax on real 
property, or (ii) county school facility occupation taxes 
imposed pursuant to Section 5-1006.7 of the Counties Code, or 
(iii) any taxes authorized under the Flood Prevention District 
Act.
    "Local sales tax increment" means, with respect to local 
sales taxes administered by the Illinois Department of Revenue, 
(i) all of the local sales tax paid by destination users, 
destination hotels, and entertainment users that is in excess 
of the local sales tax paid by destination users, destination 
hotels, and entertainment users for the same month in the base 
year, as determined by the Illinois Department of Revenue, (ii) 
in the case of a municipality forming a STAR bond district that 
is wholly within the corporate boundaries of the municipality 
and in the case of a municipality and county forming a STAR 
bond district that is only partially within such municipality, 
that portion of the local sales tax paid by taxpayers that are 
not destination users, destination hotels, or entertainment 
users that is in excess of the local sales tax paid by 
taxpayers that are not destination users, destination hotels, 
or entertainment users for the same month in the base year, as 
determined by the Illinois Department of Revenue, and (iii) in 
the case of a county in which a STAR bond district is formed 
that is wholly within a municipality, that portion of the local 
sales tax paid by taxpayers that are not destination users, 
destination hotels, or entertainment users that is in excess of 
the local sales tax paid by taxpayers that are not destination 
users, destination hotels, or entertainment users for the same 
month in the base year, as determined by the Illinois 
Department of Revenue, but only if the corporate authorities of 
the county adopts an ordinance, and files a copy with the 
Department within the same time frames as required for STAR 
bond occupation taxes under Section 31, that designates the 
taxes referenced in this clause (iii) as part of the local 
sales tax increment under this Act. "Local sales tax increment" 
means, with respect to local sales taxes administered by a 
municipality, county, or other unit of local government, that 
portion of the local sales tax that is in excess of the local 
sales tax for the same month in the base year, as determined by 
the respective municipality, county, or other unit of local 
government.  If any portion of local sales taxes are, at the 
time of formation of a STAR bond district, already subject to 
tax increment financing under the Tax Increment Allocation 
Redevelopment Act, then the local sales tax increment for such 
portion shall be frozen at the base year established in 
accordance with this Act, and all future incremental increases 
shall be included in the "local sales tax increment" under this 
Act. Any party otherwise entitled to receipt of incremental 
local sales 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.  The Illinois 
Department of Revenue shall allocate the local sales tax 
increment only if the local sales tax is administered by the 
Department.
    "Market study" means a study to determine the ability of 
the proposed STAR bond project to gain market share locally and 
regionally and to remain profitable past the term of repayment 
of STAR bonds.

    "Master developer" means a developer cooperating with a 
political subdivision to plan, develop, and implement a STAR 
bond project plan for a STAR bond district. Subject to the 
limitations of Section 25, the master developer may work with 
and transfer certain development rights to other developers for 
the purpose of implementing STAR bond project plans and 
achieving the purposes of this Act.  A master developer for a 
STAR bond district shall be appointed by a political 
subdivision in the resolution establishing the STAR bond 
district, and the master developer must, at the time of 
appointment, own or have control of, through purchase 
agreements, option contracts, or other means, not less than 50% 
of the acreage within the STAR bond district and the master 
developer or its affiliate must have ownership or control on 
June 1, 2010.
    "Master development agreement" means an agreement between 
the master developer and the political subdivision to govern a 
STAR bond district and any STAR bond projects.

    "Municipality" means the city, village, or incorporated 
town in which a proposed STAR bond district is located.

    "Pledged STAR revenues" means those sales tax and revenues 
and other sources of funds pledged to pay debt service on STAR 
bonds or to pay project costs pursuant to Section 30.  
Notwithstanding any provision to the contrary, the following 
revenues shall not constitute pledged STAR revenues or be 
available to pay principal and interest on STAR bonds: any 
State sales tax increment or local sales tax increment from a 
retail entity initiating operations in a STAR bond district 
while terminating operations at another Illinois location 
within 25 miles of the STAR bond district.  For purposes of this 
paragraph, "terminating operations" means a closing of a retail 
operation that is directly related to the opening of the same 
operation or like retail entity owned or operated by more than 
50% of the original ownership in a STAR bond district within 
one year before or after initiating operations in the STAR bond 
district, but it does not mean closing an operation for reasons 
beyond the control of the retail entity, as documented by the 
retail entity, subject to a reasonable finding by the 
municipality (or county if such retail operation is not located 
within a municipality) in which the terminated operations were 
located that the closed location contained inadequate space, 
had become economically obsolete, or was no longer a viable 
location for the retailer or serviceman.
    "Political subdivision" means a municipality or county 
which undertakes to establish a STAR bond district pursuant to 
the provisions of this Act.
    "Project costs" means and includes the sum total of all 
costs incurred or estimated to be incurred on or following the 
date of establishment of a STAR bond district that are 
reasonable or necessary to implement a STAR bond district plan 
or any STAR bond project plans, or both, including costs 
incurred for public improvements and private improvements that 
serve the public purposes set forth in Section 5 of this Act. 
Such costs include without limitation the following:
        (a) costs of studies, surveys, development of plans and 
    specifications, formation, implementation, and 
    administration of a STAR bond district, STAR bond district 
    plan, any STAR bond projects, or any STAR bond project 
    plans, including, but not limited to, staff and 
    professional service costs for architectural, engineering, 
    legal, financial, planning, or other services, provided 
    however that no charges for professional services may be 
    based on a percentage of the tax increment collected and no 
    contracts for professional services, excluding 
    architectural and engineering services, may be entered 
    into if the terms of the contract extend beyond a period of 
    3 years;
        (b) property assembly costs, including, but not 
    limited to, acquisition of land and other real property or 
    rights or interests therein, located within the boundaries 
    of a STAR bond district, demolition of buildings, site 
    preparation, site improvements that serve as an engineered 
    barrier addressing ground level or below ground 
    environmental contamination, including, but not limited 
    to, parking lots and other concrete or asphalt barriers, 
    the clearing and grading of land, and importing additional 
    soil and fill materials, or removal of soil and fill 
    materials from the site;
        (c) subject to paragraph (d), costs of buildings and 
    other vertical improvements that are located within the 
    boundaries of a STAR bond district and owned by a political 
    subdivision or other public entity, including without 
    limitation police and fire stations, educational 
    facilities, and public restrooms and rest areas;
        (c-1) costs of buildings and other vertical 
    improvements that are located within the boundaries of a 
    STAR bond district and owned by a destination user or 
    destination hotel; except that only 2 destination users in 
    a STAR bond district and one destination hotel are eligible 
    to include the cost of those vertical improvements as 
    project costs;
        (c-5) costs of buildings; rides and attractions, which 
    include carousels, slides, roller coasters, displays, 
    models, towers, works of art, and similar theme and 
    amusement park improvements; and other vertical 
    improvements that are located within the boundaries of a 
    STAR bond district and owned by an entertainment user; 
    except that only one entertainment user in a STAR bond 
    district is eligible to include the cost of those vertical 
    improvements as project costs;
        (d) costs of the design and construction of 
    infrastructure and public works located within the 
    boundaries of a STAR bond district that are reasonable or 
    necessary to implement a STAR bond district plan or any 
    STAR bond project plans, or both, except that project costs 
    shall not include the cost of constructing a new municipal 
    public building principally used to provide offices, 
    storage space, or conference facilities or vehicle 
    storage, maintenance, or repair for administrative, public 
    safety, or public works personnel and that is not intended 
    to replace an existing public building unless the political 
    subdivision makes a reasonable determination in a STAR bond 
    district plan or any STAR bond project plans, supported by 
    information that provides the basis for that 
    determination, that the new municipal building is required 
    to meet an increase in the need for public safety purposes 
    anticipated to result from the implementation of the STAR 
    bond district plan or any STAR bond project plans;
        (e) costs of the design and construction of the 
    following improvements located outside the boundaries of a 
    STAR bond district, provided that the costs are essential 
    to further the purpose and development of a STAR bond 
    district plan and either (i) part of and connected to 
    sewer, water, or utility service lines that physically 
    connect to the STAR bond district or (ii) significant 
    improvements for adjacent offsite highways, streets, 
    roadways, and interchanges that are approved by the 
    Illinois Department of Transportation.  No other cost of 
    infrastructure and public works improvements located 
    outside the boundaries of a STAR bond district may be 
    deemed project costs;
        (f) costs of job training and retraining projects, 
    including the cost of "welfare to work" programs 
    implemented by businesses located within a STAR bond 
    district;
        (g) financing costs, including, but not limited to, all 
    necessary and incidental expenses related to the issuance 
    of obligations and which may include payment of interest on 
    any obligations issued hereunder including interest 
    accruing during the estimated period of construction of any 
    improvements in a STAR bond district or any STAR bond 
    projects for which such obligations are issued and for not 
    exceeding 36 months thereafter and including reasonable 
    reserves related thereto;
        (h) to the extent the political subdivision by written 
    agreement accepts and approves the same, all or a portion 
    of a taxing district's capital costs resulting from a STAR 
    bond district or STAR bond projects necessarily incurred or 
    to be incurred within a taxing district in furtherance of 
    the objectives of a STAR bond district plan or STAR bond 
    project plans;
        (i) interest cost incurred by a developer for project 
    costs related to the acquisition, formation, 
    implementation, development, construction, and 
    administration of a STAR bond district, STAR bond district 
    plan, STAR bond projects, or any STAR bond project plans 
    provided that:
            (i) payment of such costs in any one year may not 
        exceed 30% of the annual interest costs incurred by the 
        developer with regard to the STAR bond district or any 
        STAR bond projects during that year; and
            (ii) the total of such interest payments paid 
        pursuant to this Act may not exceed 30% of the total 
        cost paid or incurred by the developer for a STAR bond 
        district or STAR bond projects, plus project costs, 
        excluding any property assembly costs incurred by a 
        political subdivision pursuant to this Act;
        (j) costs of common areas located within the boundaries 
    of a STAR bond district;
        (k) costs of landscaping and plantings, retaining 
    walls and fences, man-made lakes and ponds, shelters, 
    benches, lighting, and similar amenities located within 
    the boundaries of a STAR bond district;
        (l) costs of mounted building signs, site monument, and 
    pylon signs located within the boundaries of a STAR bond 
    district; or
        (m) if included in the STAR bond district plan and 
    approved in writing by the Director, salaries or a portion 
    of salaries for local government employees to the extent 
    the same are directly attributable to the work of such 
    employees on the establishment and management of a STAR 
    bond district or any STAR bond projects.
    Except as specified in items (a) through (m), "project 
costs" shall not include:
        (i) the cost of construction of buildings that are 
    privately owned or owned by a municipality and leased to a 
    developer or retail user  for non-entertainment retail 
    uses;
        (ii) moving expenses for employees of the businesses 
    locating within the STAR bond district;
        (iii) property taxes for property located in the STAR 
    bond district;
        (iv) lobbying costs; and
        (v) general overhead or administrative costs of the 
    political subdivision that would still have been incurred 
    by the political subdivision if the political subdivision 
    had not established a STAR bond district.
    "Project development agreement" means any one or more 
agreements, including any amendments thereto, between a master 
developer and any co-developer or subdeveloper in connection 
with a STAR bond project, which project development agreement 
may include the political subdivision as a party.

    "Projected market area" means any area within the State in 
which a STAR bond district or STAR bond project is projected to 
have a significant fiscal or market impact as determined by the 
Director.
 
    "Resolution" means a resolution, order, ordinance, or 
other appropriate form of legislative action of a political 
subdivision or other applicable public entity approved by a 
vote of a majority of a quorum at a meeting of the governing 
body of the political subdivision or applicable public entity.

    "STAR bond" means a sales tax and revenue bond, note, or 
other obligation payable from pledged STAR revenues and issued 
by a political subdivision, the proceeds of which shall be used 
only to pay project costs as defined in this Act.

    "STAR bond district" means the specific area declared to be 
an eligible area as determined by the political subdivision, 
and approved by the Director, in which the political 
subdivision may develop one or more STAR bond projects.

    "STAR bond district plan" means the preliminary or 
conceptual plan that generally identifies the proposed STAR 
bond project areas and identifies in a general manner the 
buildings, facilities, and improvements to be constructed or 
improved in each STAR bond project area.

    "STAR bond project" means a project within a STAR bond 
district which is approved pursuant to Section 20.

    "STAR bond project area" means the geographic area within a 
STAR bond district in which there may be one or more STAR bond 
projects.

    "STAR bond project plan" means the written plan adopted by 
a political subdivision for the development of a STAR bond 
project in a STAR bond district; the plan may include, but is 
not limited to, (i) project costs incurred prior to the date of 
the STAR bond project plan and estimated future STAR bond 
project costs, (ii) proposed sources of funds to pay those 
costs, (iii) the nature and estimated term of any obligations 
to be issued by the political subdivision to pay those costs, 
(iv) the most recent equalized assessed valuation of the STAR 
bond project area, (v) an estimate of the equalized assessed 
valuation of the STAR bond district or applicable project area 
after completion of a STAR bond project, (vi) a general 
description of the types of any known or proposed developers, 
users, or tenants of the STAR bond project or projects included 
in the plan, (vii) a general description of the type, 
structure, and character of the property or facilities to be 
developed or improved, (viii) a description of the general land 
uses to apply to the STAR bond project, and (ix) a general 
description or an estimate of the type, class, and number of 
employees to be employed in the operation of the STAR bond 
project.


    "State sales tax" means all of the net revenue realized 
under the Retailers' Occupation Tax Act, the Use Tax Act, the 
Service Use Tax Act, and the Service Occupation Tax Act from 
transactions at places of business located within a STAR bond 
district, excluding that portion of the net revenue realized 
under the Retailers' Occupation Tax Act, the Use Tax Act, the 
Service Use Tax Act, and the Service Occupation Tax Act from 
transactions at places of business located within a STAR bond 
district that is deposited into the Local Government Tax Fund 
and the County and Mass Transit District Fund.
    "State sales tax increment" means (i) 100% of that portion 
of the State sales tax that is in excess of the State sales tax 
for the same month in the base year, as determined by the 
Department of Revenue, from transactions at up to 2 destination 
users, one destination hotel, and one entertainment user 
located within a STAR bond district, which destination users, 
destination hotel, and entertainment user shall be designated 
by the master developer and approved by the political 
subdivision and the Director in conjunction with the applicable 
STAR bond project approval, and (ii) 25% of that portion of the 
State sales tax that is in excess of the State sales tax for 
the same month in the base year, as determined by the 
Department of Revenue, from all other transactions within a 
STAR bond district. If any portion of State sales taxes are, at 
the time of formation of a STAR bond district, already subject 
to tax increment financing under the Tax Increment Allocation 
Redevelopment Act, then the State sales tax increment for such 
portion shall be frozen at the base year established in 
accordance with this Act, and all future incremental increases 
shall be included in the State sales tax increment under this 
Act. Any party otherwise entitled to receipt of incremental 
State sales 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.  
    "Substantial change" means a change wherein the proposed 
STAR bond project plan differs substantially in size, scope, or 
use from the approved STAR bond district plan or STAR bond 
project plan.

    "Taxpayer" means an individual, partnership, corporation, 
limited liability company, trust, estate, or other entity that 
is subject to the Illinois Income Tax Act.

    "Total development costs" means the aggregate public and 
private investment in a STAR bond district, including project 
costs and other direct and indirect costs related to the 
development of the STAR bond district.
    "Traditional retail use" means the operation of a business 
that derives at least 90% of its annual gross revenue from 
sales at retail, as that phrase is defined by Section 1 of the 
Retailers' Occupation Tax Act, but does not include the 
operations of destination users, entertainment users, 
restaurants, hotels, retail uses within hotels, or any other 
non-retail uses.
    "Vacant" means that portion of the land in a proposed STAR 
bond district that is not occupied by a building, facility, or 
other vertical improvement.


(Source: P.A. 96-939, eff. 6-24-10.)
 
    Section 10. The Flood Prevention District Act is amended  by 
changing Section 25 as follows:
 


    (70 ILCS 750/25)

    Sec. 25. Flood prevention retailers' and service 
occupation taxes. 
    (a) If the Board of Commissioners of a flood prevention 
district determines that an emergency situation exists  
regarding levee repair or flood prevention, and upon an 
ordinance confirming the determination adopted by the 
affirmative vote of a majority of the members of the county 
board of the county in which the district is situated, the 
county may impose a flood prevention
retailers' occupation tax 
upon all persons engaged in the business of
selling tangible 
personal property at retail within the territory of the 
district to provide revenue to pay the costs of providing 
emergency levee repair and flood prevention and to secure the 
payment of bonds, notes, and other evidences of indebtedness 
issued under this Act for a period not to exceed 25 years or as 
required to repay the bonds, notes, and other evidences of 
indebtedness issued under this Act.
The tax rate shall be 0.25%

of the gross receipts from all taxable sales made in the course 
of that
business.  The tax
imposed under this Section and all 
civil penalties that may be
assessed as an incident thereof 
shall be collected and enforced by the
State Department of 
Revenue.  The Department shall have full power to
administer and 
enforce this Section; to collect all taxes and penalties
so 
collected in the manner hereinafter provided; and to determine 
all
rights to credit memoranda arising on account of the 
erroneous payment
of tax or penalty hereunder.  
    In the administration of and compliance with this 
subsection, the Department and persons who are subject to this 
subsection (i) have the same rights, remedies, privileges, 
immunities, powers, and duties, (ii) are subject to the same 
conditions, restrictions, limitations, penalties, and 
definitions of terms, and (iii) shall employ the same modes of 
procedure as are set forth in Sections 1 through 1o, 2 through 
2-70 (in respect to all provisions contained in those Sections 
other than the State rate of tax), 2a through 2h, 3 (except as 
to the disposition of taxes and penalties collected), 4, 5, 5a, 
5b, 5c, 5d, 5e, 5f, 5g, 5h, 5i, 5l, 6, 6a, 6b, 6c, 7, 8, 9, 10, 
11, 11a, 12, and 13 of the Retailers' Occupation Tax Act and 
all provisions of the Uniform Penalty and Interest Act as if 
those provisions were set forth in this subsection.
    Persons subject to any tax imposed under this Section may 
reimburse themselves for their seller's tax
liability 
hereunder by separately stating the tax as an additional

charge, which charge may be stated in combination in a single 
amount
with State taxes that sellers are required to collect 
under the Use
Tax Act, under any bracket schedules the

Department may prescribe.
    If a tax is imposed under this subsection (a), a tax shall 
also
be imposed under subsection (b) of this Section.
    (b) If a tax has been imposed under subsection (a), a flood 
prevention service occupation
tax shall
also be imposed upon 
all persons  engaged within the territory of the district in
the 
business of making sales of service, who, as an incident to 
making the sales
of service, transfer tangible personal 
property,
either in the form of tangible personal property or 
in the form of real estate
as an incident to a sale of service 
to provide revenue to pay the costs of providing emergency 
levee repair and flood prevention and to secure the payment of 
bonds, notes, and other evidences of indebtedness issued under 
this Act for a period not to exceed 25 years or as required to 
repay the bonds, notes, and other evidences of indebtedness.  
The tax rate shall be 0.25% of the selling price
of all 
tangible personal property transferred.
    The tax imposed under this subsection and all civil

penalties that may be assessed as an incident thereof shall be 
collected
and enforced by the State Department of Revenue.  The 
Department shall
have full power to administer and enforce this 
subsection; to collect all
taxes and penalties due hereunder; 
to dispose of taxes and penalties
collected in the manner 
hereinafter provided; and to determine all
rights to credit 
memoranda arising on account of the erroneous payment
of tax or 
penalty hereunder.  
    In the administration of and compliance with this 
subsection, the Department and persons who are subject to this 
subsection shall (i) have the same rights, remedies, 
privileges, immunities, powers, and duties, (ii) be subject to 
the same conditions, restrictions, limitations, penalties, and 
definitions of terms, and (iii) employ the same modes of 
procedure as are set forth in Sections 2 (except that the 
reference to State in the definition of supplier maintaining a 
place of business in this State means the district), 2a through 
2d, 3 through 3-50 (in respect to all provisions contained in 
those Sections other than the State rate of tax), 4 (except 
that the reference to the State shall be to the district), 5, 
7, 8 (except that the jurisdiction to which the tax is a debt 
to the extent indicated in that Section 8 is the district), 9 
(except as to the disposition of taxes and penalties 
collected), 10, 11, 12 (except the reference therein to Section 
2b of the Retailers' Occupation Tax Act), 13 (except that any 
reference to the State means the district), Section 15, 16, 17, 
18, 19, and 20 of the Service Occupation Tax Act and all 
provisions of the Uniform Penalty and Interest Act, as fully as 
if those provisions were set forth herein.
    Persons subject to any tax imposed under the authority 
granted
in this subsection may reimburse themselves for their 
serviceman's tax
liability hereunder by separately stating the 
tax as an additional
charge, that charge may be stated in 
combination in a single amount
with State tax that servicemen 
are authorized to collect under the
Service Use Tax Act, under 
any bracket schedules the
Department may prescribe.
    (c)  The taxes imposed in subsections (a) and (b) may not be 
imposed on personal property titled or registered with an 
agency of the State; food for human consumption that is to be 
consumed off the premises where it is sold (other than 
alcoholic beverages, soft drinks, and food that has been 
prepared for immediate consumption); prescription and 
non-prescription medicines, drugs, and medical appliances; 
modifications to a motor vehicle for the purpose of rendering 
it usable by a disabled person; or insulin, urine testing 
materials, and syringes and needles used by diabetics.
    (d) Nothing in this Section shall be construed to authorize 
the
district to impose a tax upon the privilege of engaging in 
any business
that under the Constitution of the United States 
may not be made the
subject of taxation by the State.
    (e) The certificate of registration that is issued by the 
Department to a retailer under the Retailers' Occupation Tax 
Act or a serviceman under the Service Occupation Tax Act 
permits the retailer or serviceman to engage in a business that 
is taxable without registering separately with the Department 
under an ordinance or resolution under this Section.
    (f) The Department shall immediately pay over to the State 
Treasurer, ex officio, as trustee, all taxes and penalties 
collected under this Section to be deposited into the Flood 
Prevention Occupation Tax Fund, which shall be an 
unappropriated trust fund held outside the State treasury.
    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, to the STAR Bonds Revenue Fund the 
local sales tax increment, as defined in the Innovation 
Development and Economy Act, collected under this Section 
during the second preceding calendar month for sales within a 
STAR bond district. The Department shall make this 
certification only if the flood prevention district imposes a 
tax on real property as provided in the definition of "local 
sales taxes" under the Innovation Development and Economy Act. 
    On After the monthly transfer to the STAR Bonds Revenue 
Fund, on or before the 25th day of each calendar month, the 
Department shall prepare and certify to the Comptroller the 
disbursement of stated sums of money to the counties from which 
retailers or servicemen have paid taxes or penalties to the 
Department during the second preceding calendar month. The 
amount to be paid to each county is equal to the amount (not 
including credit memoranda) collected from the county under 
this Section during the second preceding calendar month by the 
Department, (i) less 2% of that amount, which shall be 
deposited into the Tax Compliance and Administration Fund and 
shall be used by the Department in administering and enforcing 
the provisions of this Section on behalf of the county, (ii) 
plus an amount that the Department determines is necessary to 
offset any amounts that were erroneously paid to a different 
taxing body; (iii) less an amount equal to the amount of 
refunds made during the second preceding calendar month by the 
Department on behalf of the county; and (iv) less any amount 
that the Department determines is necessary to offset any 
amounts that were payable to a different taxing body but were 
erroneously paid to the county; and (v) less any amounts that 
are transferred to the STAR Bonds Revenue Fund. When certifying 
the amount of a monthly disbursement to a county under this 
Section, the Department shall increase or decrease the amounts 
by an amount necessary to offset any miscalculation of previous 
disbursements within the previous 6 months from the time a 
miscalculation is discovered.
    Within 10 days after receipt by the Comptroller from the 
Department of the disbursement certification to the counties 
provided for in this Section, the Comptroller shall cause the 
orders to be drawn for the respective amounts in accordance 
with directions contained in the certification.
    If the Department determines that a refund should be made 
under this Section to a claimant instead of issuing a credit 
memorandum, then the Department shall notify the Comptroller, 
who shall cause the order to be drawn for the amount specified 
and to the person named in the notification from the 
Department. The refund shall be paid by the Treasurer out of 
the Flood Prevention Occupation Tax Fund.
    (g) If a county imposes a tax under this Section, then the 
county board shall, by ordinance, discontinue the tax upon the 
payment of all indebtedness of the flood prevention district. 
The tax shall not be discontinued until all indebtedness of the 
District has been paid. 
    (h) Any ordinance imposing the tax under this Section, or 
any ordinance that discontinues the tax, must be certified by 
the county clerk and filed with the Illinois Department of 
Revenue either (i) on or before the first day of April, 
whereupon the Department shall proceed to administer and 
enforce the tax or change in the rate as of the first day of 
July next following the filing; or (ii) on or before the first 
day of October, whereupon the Department shall proceed to 
administer and enforce the tax or change in the rate as of the 
first day of January next following the filing.
    (j) County Flood Prevention Occupation Tax Fund. All 
proceeds received by a county from a tax distribution under 
this Section must be maintained in a special fund known as the 
[name of county] flood prevention occupation tax fund. The 
county shall, at the direction of the flood prevention 
district, use moneys in the fund to pay the costs of providing 
emergency levee repair and flood prevention and to pay bonds, 
notes, and other evidences of indebtedness issued under this 
Act. 
    (k) This Section may be cited as the Flood Prevention 
Occupation Tax Law.

(Source: P.A. 95-719, eff. 5-21-08; 95-723, eff. 6-23-08; 
96-939, eff. 6-24-10.)

 
 
    Section 99. Effective date. This Act takes effect upon 
becoming law.