SB1909eng 96TH GENERAL ASSEMBLY

SB1909 Engrossed LRB096 11215 RLJ 21616 b

AN ACT concerning economic development.

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

Section 1. Short title. This Act may be cited as the STAR Bonds Financing Act.

Section 5. Purpose. It is hereby found and declared that the purpose of this Act is to promote, stimulate, and develop the general and economic welfare of the State of Illinois and its communities and to assist in the development and redevelopment of major tourism, entertainment, retail, and related destination projects within eligible areas of the State, thereby creating new jobs, stimulating significant capital investment, and promoting the general welfare of the citizens of this State, by authorizing municipalities and counties to issue sales tax and revenue (STAR) bonds for the financing of STAR bond projects as defined in Section 10, and to otherwise exercise the powers and authorities granted to municipalities. It is further found and declared to be the policy of the State, in the interest of promoting the health, safety, morals, and general welfare of all the people of the State, to provide incentives to create new job opportunities and to promote major tourism, entertainment, retail, and related destination projects within the State. It is further found and declared:

(a) that as a result of the costs of land assemblage, financing, infrastructure, and other project costs, the private sector, without the assistance contemplated in this Act, is unable to develop major tourism, entertainment, retail, and related destination projects in the State;

(b) that the projects for which this Act is intended must be of a certain size, scope and acreage and have direct access to major highways, and must be developed in a cohesive and comprehensive manner;

(c) that the eligible tracts of land, significant portions of which are vacant and located in the 100-year flood plain, present unique development obstacles and are more likely to remain underutilized and undeveloped, or developed in a piecemeal manner resulting in inefficient and poorly planned developments that do not maximize job creation, job retention, tourism, and tax revenue generation within the State;

(d) that there are multiple eligible areas in the State that could benefit from this Act;

(e) that municipalities of the State that already have an enterprise zone in place have a sufficient tool to encourage development and to preserve and enhance their local tax bases and job opportunities, and otherwise achieve the purposes set forth in this Act;

(f) that investment in major tourism, entertainment, retail, and related destination projects within the State would stimulate economic activity in the State, including the creation and maintenance of jobs, the creation of new and lasting infrastructure and other improvements, and the attraction of interstate tourists and entertainment events which generate significant economic activity;

(g) that the continual encouragement, development, growth, and expansion of major tourism, entertainment, retail, and related destination projects within the State requires a cooperative and continuous partnership between government and the public sector;

(h) that the State has a responsibility to help create a favorable climate for new and improved job opportunities for its citizens and to increase the tax base of the State and its political subdivisions by encouraging development by the private sector of major tourism, entertainment, retail, and related destination projects within the State;

(i) that the stagnation of local tax bases and the loss of job opportunities within the State has persisted despite efforts of State and local authorities and private organizations to create major tourism, entertainment, retail, and related destination projects within the State;

(j) that the stagnation of local tax bases and the persistent loss of job opportunities in the State may continue and worsen if the State and its political subdivisions are not able to provide additional incentives to developers of major tourism, entertainment, retail, and related destination projects;

(k) that the provision of additional incentives by the State and its political subdivisions will relieve conditions of unemployment, maintain existing levels of employment, create new job opportunities, retain jobs within the State, increase tourism and commerce within the State, and increase the tax base of the State and its political subdivisions;

(l) that the powers conferred by this Act promote and protect the health, safety, morals, and welfare of the State, and are for a public purpose and public use for which public money and resources may be expended; and

(m) that the necessity in the public interest for the provisions of this Act is hereby declared as a matter of legislative determination.

Section 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.

"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 Commerce and Economic Opportunity.

"Economic impact study" means a study to project the financial benefit of the proposed STAR bond project to the local, regional, and State economies.

"Eligible area" means any improved or vacant area that is contiguous and is not, in the aggregate, less than 600 acres which must include only parcels of real property directly and substantially benefited by the proposed STAR bond district plan, which is located adjacent to the intersection of at least 2 highways, one of which is an interstate highway, which area must be comprised of land which is at least 90% vacant, and at least 30% of which is located in the 100-year flood plain. The area may be bisected by streets, highways, roads, alleys, railways, bike paths, streams, rivers, and other water ways and still be deemed contiguous. In addition, in order to constitute an eligible area one of the following requirements must be satisfied:

(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;

(b) the governing body of the political subdivision shall have determined that the area is of a blighted area as determined under the Business District Development and Redevelopment Act;

(c) the governing body of the political subdivision shall have made findings with respect to the property, the proposed STAR bond project, and the proposed master developer that would be required to enter into an economic incentive agreement pursuant to the provisions of Section 8-11-20 of the Illinois Municipal Code; or

(d) 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.

"Feasibility study" means a feasibility study as defined in subsection (b) of Section 20.

"Local sales taxes" means taxes paid to a municipality, county, or other local governmental entity from the Local Government Tax Fund arising from sales by retailers and servicemen within a STAR bond district, and any local taxes received by a local governmental entity arising from sales by retailers and servicemen within a STAR bond district, including transient guest taxes, sales taxes on goods, services, and utilities, business district sales taxes, the Metro-East Mass Transit District Tax, and the Metro-East Park and Recreation District Tax.

"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. 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.

"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 the 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.

"Political subdivision" means a municipality or county which undertakes to establish a STAR bond district pursuant to the provisions of this Act.

"Project development agreement" means any one or more agreements, including any amendments thereto, between a master developer and any co-developer or sub-developer in connection with a STAR bond project, which project development agreement may include the political subdivision as a party.

"Project costs" means those costs, whether incurred prior to, on, or following the date of establishment of a STAR bond district, which are necessary to implement a STAR bond district plan or a STAR bond project plan, or both, including costs incurred for:

(a) acquisition of real property within the STAR bond project area;

(b) payment of relocation assistance pursuant to a relocation assistance plan;

(c) site preparation costs, including but not limited to: clearance of any area within a STAR bond district by demolition or removal of any existing buildings, structures, fixtures, utilities, and improvements; clearing and grading; importing additional soil and fill materials or removal of soil and fill materials from the site; and installation, repair, construction, reconstruction, extension or relocation of public streets, public utilities, and other public site improvements located both within and outside the boundaries of a STAR bond district that are essential to the preparation of the STAR bond district;

(d) sanitary and storm sewers and lift stations located within or outside the boundaries of a STAR bond district that are essential to the preparation of the STAR bond district;

(e) drainage conduits, channels, levees, canals, and storm water detention and retention facilities located within or outside the boundaries of a STAR bond district that are essential to the preparation of the STAR bond district;

(f) street grading, paving, graveling, macadamizing, curbing, guttering, and surfacing within or outside the boundaries of a STAR bond district that are essential to the preparation of the STAR bond district;

(g) street light fixtures, parking facility lighting, connections, and facilities located within or outside the boundaries of a STAR bond district that are essential to the preparation of the STAR bond district;

(h) underground gas, water, heating, and electrical services and connections located within the public right-of-way located within or outside the boundaries of a STAR bond district that are essential to the preparation of the STAR bond district;

(i) sidewalks and pedestrian underpasses or overpasses, including bike trails and walking trails, bridges for pedestrian or vehicular traffic located within or outside the boundaries of a STAR bond district that are essential to the preparation of the STAR bond district;

(j) drives and driveway approaches located within the public right-of-way located within or outside the boundaries of a STAR bond district that are essential to the preparation of the STAR bond district;

(k) water mains and extensions located within or outside the boundaries of a STAR bond district that are essential to the preparation of the STAR bond district;

(l) plazas, malls, arcades, and other common areas;

(m) parking lots and other parking facilities, including multi-level parking structures;

(n) landscaping and plantings, man-made lakes and ponds, fountains, waterfalls, water features, shelters, benches, sculptures, lighting, public art, decorations, and similar amenities;

(o) mounted building signs, site monument and pylon signs, traffic and directional signs and signals located within or outside the boundaries of a STAR bond district that are essential to the preparation of the STAR bond district;

(p) public restrooms and rest areas, convention centers, community centers, sports arenas and complexes, museums and aquariums;

(q) bridge, overpass, interchange, intersection, bus and train stop stations and shelters, lake or river ports, rest areas, railroad and other mass transit improvements, and infrastructure improvements located within or outside the boundaries of a STAR bond district that are essential to the preparation of the STAR bond district;

(r) retaining walls and fences located within or outside the boundaries of a STAR bond district that are essential to the preparation of the STAR bond district;

(s) personal property that is a unique amenity to the STAR bond project, including memorabilia, artifacts, museum exhibits, and other similar attractions;

(t) buildings or other vertical improvements that are owned by a not-for-profit entity, a political subdivision, or other public entity, including without limitation, police and fire stations, stadiums and arenas, and public educational facilities;

(u) reasonable costs of a market study, feasibility study, economic impact study, and legal, architectural surveying, title examination and insurance policy, accounting, engineering and other consulting fees, program management, development management, bond and underwriting fees incurred in connection with a STAR bond project; and any other related expenses to redevelop and finance the STAR bond project;

(v) fees and commissions which are considered reasonable and customary in commercial real estate development and paid to developers, real estate brokers, salespersons, and other agents, financial advisors or any other consultants who represent the developers or any other businesses located in a STAR bond district, provided however that project costs shall not include secondary commissions or fees paid for leases or sales to users after original acquisition of the site and the original STAR bond project between master developer and a developer;

(w) if included in the STAR bond district plan and approved 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 the employees on the establishment, management, and promotion of a STAR bond district and STAR bond projects; and

(x) financing costs, including but not limited to all necessary and incidental expenses related to the issuance of obligations, payment of any interest on any obligations issued under this Act that accrue during the estimated period of construction of any STAR bond project for which the obligations are issued and for not more than 36 months after that period, and any reasonable reserves related to the issuance of the obligations.

(y) except as specified in subsections (a) through (x), project costs shall not include:

(i) costs incurred in connection with the construction of buildings or other vertical improvements that are owned or leased by a developer;

(ii) moving expenses for employees of the businesses locating within the STAR bond district;

(iii) property taxes for property located within the STAR bond district; and

(iv) lobbying costs.

"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.

"Relocation Assistance Plan" means the relocation assistance plan adopted by the political subdivision as provided in Section 50.

"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.

"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 taxes paid by retailers and servicemen on transactions at places of business located within a STAR bond district pursuant to the Retailers' Occupation Tax Act, the Use Tax Act, the Service Use Tax Act, and the Service Occupation Tax Act, electric and gas tax charges imposed on owners and tenants, other than residential customers, of properties located within the STAR bond district under Section 9-222 of the Public Utilities Act, the Hotel Operators' Occupation Tax, and any other sales or use taxes imposed by the State within a STAR bond district.

"State sales tax increment" means that portion of the revenue derived from State sales taxes collected from taxpayers doing business within that portion of a STAR bond district occupied by a STAR bond project that is in excess of the amount of base year revenue determined by the Department of Revenue.

"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.

"Vacant" means that portion of the land in a proposed STAR bond district which is not occupied by a building, facility, or other vertical improvement.

Section 15. Establishment of STAR bond district. The governing body of a municipality may establish a STAR bond district within an eligible area within the municipality or partially outside the boundaries of the municipality in an unincorporated area of the county. A STAR bond district which is partially outside the boundaries of the municipality must also be approved by the governing body of the county by the passage of a resolution. The governing body of a county may establish a STAR bond district in an eligible area in any unincorporated area of the county.

(a) When a political subdivision proposes to establish a STAR bond district, the political subdivision shall adopt a resolution stating that the political subdivision is considering the establishment of a STAR bond district. The resolution shall:

(1) Give notice that a public hearing will be held to consider the establishment of a STAR bond district and fix the date, hour, and place of the public hearing provided that notice of the hearing shall be provided as set forth in item (2) of subsection (e) of Section 20;

(2) describe the proposed general boundaries of the STAR bond district;

(3) describe the STAR bond district plan;

(4) require that a description and map of the proposed STAR bond district are available for inspection at a time and place designated;

(5) identify the master developer for the STAR bond district; and

(6) require that the governing body will consider findings necessary for the establishment of a STAR bond district.

(b) Upon (i) the conclusion of the public hearing and (ii) the filing of the proposed master developer's written approval with the clerk of the political subdivision, the governing body of the political subdivision shall consider a resolution to establish the STAR bond district.

(1) A resolution to establish a STAR bond district shall:

(A) Make findings that the proposed STAR bond district is to be developed with one or more STAR bond projects;

(B) make findings that the STAR bond district is an eligible area;

(C) contain a STAR bond district plan that identifies in a general manner the buildings and facilities that are proposed to be constructed or improved in subsequent STAR bond projects;

(D) contain the legal description of the STAR bond district;

(E) appoint the master developer for the STAR bond district; and

(F) establish the STAR bond district, contingent upon approval of the Director as set forth in subsection (d).

(2) If the resolution is not adopted by the political subdivision within 60 days from the conclusion of the public hearing, then the STAR bond district shall not be established.

(c) Upon the establishment of a STAR bond district, the STAR bond district and any STAR bond projects shall be governed by a master development agreement between the political subdivision and the master developer. A STAR bond district which is partially outside the boundaries of a municipality shall only require one master development agreement; the agreement shall be between the municipality and the master developer. In no event shall there be more than one master development agreement governing the terms and conditions of a STAR bond district.

(d) Upon adoption of the resolution to establish a STAR bond district, the political subdivision shall submit the proposed STAR bond district to the Director for approval which shall include a finding by the Director that (i) the proposed STAR bond district is an eligible area, (ii) no portion of the proposed STAR bond district is located in a municipality that has an enterprise zone created pursuant to the Illinois Promotion Act, (iii) the STAR bond district plan includes a projected capital investment of at least $300,000,000, and (iv) the STAR bond district plan is reasonably projected to produce at least $300,000,000 of annual gross sales revenues and 1,000 new jobs. The Director may only approve one STAR bond district within any projected market area.

Section 20. Approval of STAR bond projects. The governing body of a political subdivision may establish one or more STAR bond projects in any STAR bond district. A STAR bond project which is partially outside the boundaries of a municipality must also be approved by the governing body of the county by resolution.

(a) After the establishment of a STAR bond district, the master developer may propose one or more STAR bond projects to a political subdivision and the master developer shall, in cooperation with the political subdivision, prepare a STAR bond project plan in consultation with the planning commission of the political subdivision, if any. The STAR bond project plan may be implemented in separate development stages.

(b) Any political subdivision considering a STAR bond project within a STAR bond district shall cause to be prepared an independent feasibility study by an accredited feasibility consultant. The feasibility study shall include the following:

(1) the estimated amount of pledged STAR revenues expected to be collected in each year through the maturity date of the proposed STAR bonds;

(2) a statement of how the jobs and taxes obtained from the STAR bond project will contribute significantly to the economic development of the State and region;

(3) visitation expectations;

(4) the unique quality of the project;

(5) economic impact study;

(6) market study;

(7) integration and collaboration with other resources or businesses;

(8) the quality of service and experience provided, as measured against national consumer standards for the specific target market;

(9) project accountability, measured according to best industry practices;

(10) the expected return on State and local investment that the STAR bond project is anticipated to produce; and

(11) an anticipated principal and interest payment schedule on the STAR bonds.

The failure to include all information enumerated in this subsection in the feasibility study for a STAR bond project shall not affect the validity of STAR bonds issued pursuant to this Act.

(c) If the political subdivision determines the STAR bond project is feasible, the STAR bond project plan shall include:

(1) A summary of the feasibility study;

(2) a reference to the STAR bond district plan that identifies the STAR bond project area that is set forth in the STAR bond project plan that is being considered;

(3) a legal description and map of the STAR bond project area to be developed or redeveloped;

(4) the relocation assistance plan;

(5) a description of the buildings and facilities proposed to be constructed or improved in the STAR bond project area; and

(6) any other information the governing body of the political subdivision deems reasonable and necessary to advise the public of the intent of the STAR bond project plan.

(d) Upon a finding by the planning and zoning commission of the political subdivision that the STAR bond project plan is consistent with the intent of the comprehensive plan for the development of the political subdivision, the governing body of the political subdivision shall adopt a resolution stating that the political subdivision is considering the adoption of the STAR bond project plan. The resolution shall:

(1) Give notice that a public hearing will be held to consider the adoption of the STAR bond project plan and fix the date, hour, and place of the public hearing;

(2) describe the general boundaries of the STAR bond district within which the STAR bond project will be located and the date of establishment of the STAR bond district;

(3) describe the general boundaries of the area proposed to be included within the STAR bond project area;

(4) provide that the STAR bond project plan and map of the area to be redeveloped or developed are available for inspection during regular office hours in the offices of the political subdivision; and

(5) contain a summary of the terms and conditions of any proposed project development agreement with the political subdivision.

(e) A public hearing shall be conducted to consider the adoption of any STAR bond project plan.

(1) The date fixed for the public hearing to consider the adoption of the STAR bond project plan shall be not less than 20 nor more than 90 days following the date of the adoption of the resolution fixing the date of the hearing.

(2) A copy of the municipality's resolution providing for the public hearing shall be sent by certified mail, return receipt requested, to the governing body of the county. A copy of the political subdivision's resolution providing for the public hearing shall be sent by certified mail, return receipt requested, to each person or persons in whose name the general taxes for the last preceding year were paid on each parcel of land lying within the proposed STAR bond project area within 10 days following the date of the adoption of the resolution. The resolution shall be published once in a newspaper of general circulation in the political subdivision not less than one week nor more than 3 weeks preceding the date fixed for the public hearing. A map or aerial photo clearly delineating the area of land proposed to be included within the STAR bond project area shall be published with the resolution.

(3) At the public hearing, a representative of the political subdivision or master developer shall present the STAR bond project plan. Following the presentation of the STAR bond project plan, all interested persons shall be given an opportunity to be heard. The governing body may continue the date and time of the public hearing.

(f) Upon conclusion of the public hearing, the governing body of the political subdivision may adopt the STAR bond project plan by a resolution approving the STAR bond project plan.

(g) After the adoption by the corporate authorities of the political subdivision of a STAR bond project plan, the political subdivision may enter into a project development agreement if the master developer has requested the political subdivision to be a party to the project development agreement pursuant to subsection (b) of Section 25.

(h) Within 60 days after the adoption by the political subdivision of a STAR bond project plan, the clerk of the political subdivision shall transmit a copy of the legal description of the land within the STAR bond district, a copy of the resolution adopting the STAR bond project plan, and a map or plat indicating the boundaries of the STAR bond district to the clerk, treasurer, and governing body of the county.

(i) Any STAR bond project must be approved by the political subdivision prior to that date which is 23 years from the date of the approval of the STAR bond district, provided however that any amendments to such STAR bond project may occur following such date.

(j) Any developer of a STAR bond project shall commence work on the STAR bond project within 3 years from the date of adoption of the STAR bond project plan. If the developer fails to commence work on the STAR bond project within the 3-year period, funding for the project shall cease and the developer of the project or complex shall have one year to appeal to the political subdivision for reapproval of the project and funding. If the project is reapproved, the 3-year period for commencement shall begin again on the date of the reapproval.

(k) After the adoption by the corporate authorities of the political subdivision of a STAR bond project plan, the political subdivision may authorize the issuance of the STAR bonds in one or more series to finance the STAR bond project in accordance with the provisions of this Act.

(l) The maximum maturity of STAR bonds issued to finance a STAR bond project shall not exceed 23 years from the first date of distribution of State sales tax revenues from the STAR bond project to the political subdivision, unless the political subdivision extends such maturity by resolution up to a maximum of 35 years from the date of the first distribution. Any extension shall require the approval of the Director.

Any substantial changes to a STAR bond project plan as adopted shall be subject to a public hearing following publication of notice thereof in a newspaper of general circulation in the political subdivision and approval by resolution of the governing body of the political subdivision.

Section 25. Co-Developers and sub-developers. Upon approval of a STAR bond project by the political subdivision, the master developer may, in its discretion, develop the STAR bond project on its own or it may develop the STAR bond project with another developer.

(a) A master developer may sell, lease, or otherwise convey its property interest in the STAR bond project area to a co-developer or sub-developer and a master developer may also assign or transfer its development rights in the STAR bond project to a co-developer or sub-developer.

(b) A master developer may enter into one or more agreements with a co-developer or sub-developer in connection with a STAR bond project, and the master developer may request that the political subdivision become a party to the project development agreement, or the master developer may request that the political subdivision amend its master development agreement to provide for certain terms and conditions that may be related to the co-developer or sub-developer and the STAR bond project. For any project development agreement which the political subdivision would be a party or for any amendments to the master development agreement, the terms and conditions must be acceptable to both the master developer and the political subdivision.

Section 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) all of the local sales taxes of a municipality and county;

(4) any tax increment financing revenues collected within the STAR bond district under the Tax Increment Allocation Act, and any special service area taxes collected within the STAR bond district under the Special Service Area 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 tax increment financing plan or special service area plan;

(5) all of the State sales tax increment; the Director's approval of a STAR bond district shall be deemed an irrevocable pledge of the State sales tax increment;

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

(7) 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) Local sales taxes and State sales taxes shall, for the purposes of this Act, be deemed to accrue and shall be collected at the point of sale for all sales transactions within a STAR bond district, regardless of whether goods or services sold are subsequently delivered to customers at a location outside of the STAR bond district.

(d) 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.

(e) For each STAR bond project financed with STAR bonds payable from the pledged STAR revenues, the political subdivision shall prepare and submit to the Director 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.

(f) The Department of Revenue shall distribute State sales tax revenues received from STAR bond projects to the political subdivision on a monthly basis.

Section 35. Alternate bonds and general obligation bonds. A political subdivision shall have the power to issue alternate revenue and other general obligation bonds to finance the undertaking, establishment, or redevelopment of any STAR bond project as provided and pursuant to the procedures set forth in the Local Government Debt Reform Act. A political subdivision shall have the power to issue general obligation bonds to finance the undertaking, establishment, or redevelopment of any STAR bond project on approval by the voters of the political subdivision of a proposition authorizing the issuance of such bonds.

The full faith and credit of the State, any department, authority, public corporation or quasi-public corporation of the State, any State college or university, or any other public agency created by the State shall not be pledged for any payment under any obligation authorized by this Act.

Section 40. Amendments to STAR bond district. Any addition of real property to a STAR bond district or any substantial change to a STAR bond district plan shall be subject to the same procedure for public notice, hearing, and approval as is required for the establishment of the STAR bond district pursuant to this Act.

(a) The addition or removal of land to or from a STAR bond district shall require the consent of the master developer of the STAR bond district.

(b) Any land which is outside of, but is contiguous to an established STAR bond district and is subsequently owned, leased, or controlled by the master developer shall be added to a STAR bond district at the request of the master developer to the political subdivision, provided that the land becomes a part of a STAR bond project area.

(c) If a political subdivision has undertaken a STAR bond project within a STAR bond district, and the political subdivision desires to subsequently remove more than a de minimus amount of real property from the STAR bond district, then prior to any removal of property the political subdivision must provide a revised feasibility study showing that the pledged STAR revenues from the resulting STAR bond district within which the STAR bond project is located are estimated to be sufficient to pay the project costs. If the revenue from the resulting STAR bond district is insufficient to pay the project costs, then the property may not be removed from the STAR bond district. Any removal of real property from a STAR bond district shall be approved by a resolution of the governing body of the political subdivision.

Section 45. Other incentives. Nothing contained in this Act shall be deemed to preclude the use of grants, tax abatements and exemptions, tax increment financing, income and tax credits, incentive agreements, special service area taxes, or other types of bonds or other public incentives in connection with STAR bond projects.

Section 50. Relocation assistance. Before any property shall be acquired for a STAR bond project pursuant to eminent domain, a relocation assistance plan shall be approved by the governing body of the political subdivision proposing to undertake the condemnation. The relocation plan shall be substantially similar to provisions of the Uniform Relocation Assistance and Real Property Acquisition Act and regulations promulgated thereunder.

Section 55. Reporting taxes. Notwithstanding any other provisions of law to the contrary, copies of all retailers' sales, use, and transient guest tax returns filed with the Department of Revenue in connection with a STAR bond project area or STAR bond project, for which sales, use, and transient guest tax revenues are pledged or otherwise intended to be used in whole or in part for the payment of STAR bonds issued to finance project costs in the STAR bond project area, shall be provided by the Department of Revenue to the bond trustee, escrow agent, or paying agent for the bonds upon the written request of the political subdivision within 15 days of receipt by the Director of the Department of Revenue.

(a) The bond trustee, escrow agent, or paying agent shall keep the retailers' sales, use, and transient guest tax returns and the information contained therein confidential, but may use the information for purposes of allocating and depositing the sales, use, and transient guest tax revenues in connection with the bonds used to finance project costs in the STAR bond district. Except as otherwise provided herein, the sales, use, and transient guest tax returns received by the bond trustee, escrow agent, or paying agent shall be subject to the provisions of Chapter 35 of the Illinois Compiled Statutes, including Section 3 of the Retailers' Occupation Tax Act, Section 6 of the Hotel Operators' Occupation Tax Act, and Section 9 of the Use Tax Act.

(b) The Department of Revenue shall determine when the amount of sales tax and other revenues that have been collected and distributed to the bond debt service or reserve fund is sufficient to satisfy all principal and interest costs to the maturity date or dates of any STAR bonds issued by a political subdivision to finance a STAR bond project. Thereafter, all sales tax and other revenues shall be collected and distributed in accordance with applicable law.

Section 60. Severability. If any provision of this Act or the application thereof to any persons or circumstances is held invalid, such invalidity shall not affect other provisions or application of the Act which can be given effect without the invalid provisions or application and to this end the provisions of this Act are declared to be severable.

Section 65. Open meetings. The public hearing records, feasibility study, and other documents that do not otherwise meet a confidentiality exemption shall be subject to the Open Meetings Act.

Section 70. Powers of political subdivisions. The provisions of this Act are intended to be supplemental and in addition to all other power or authority granted to political subdivisions, shall be construed liberally and shall not be construed as a limitation of any power or authority otherwise granted. In addition to the powers a political subdivision may have under other provisions of law, a political subdivision shall have the following powers in connection with a STAR bond district:

(a) To make and enter into all contracts necessary or incidental to the implementation and furtherance of a STAR bond district plan.

(b) Within a STAR bond district, to acquire by purchase, donation, or lease, and to own, convey, lease, mortgage, or dispose of land and other real or personal property or rights or interests in property and to grant or acquire licenses, easements, and options with respect to property, all in the manner and at a price the political subdivision determines is reasonably necessary to achieve the objectives of the STAR bond project.

(c) To clear any area within a STAR bond district by demolition or removal of any existing buildings, structures, fixtures, utilities, or improvements and to clear and grade land.

(d) To install, repair, construct, reconstruct, extend or relocate public streets, public utilities, and other public site improvements located both within and outside the boundaries of a STAR bond district that are essential to the preparation of a STAR bond district for use in accordance with a STAR bond district plan.

(e) To renovate, rehabilitate, reconstruct, relocate, repair, or remodel any existing buildings, improvements, and fixtures within a STAR bond district.

(f) To install or construct any public buildings, structures, works, streets, improvements, utilities, or fixtures within a STAR bond district.

(g) To issue STAR bonds as provided in this Act.

(h) To fix, charge, and collect fees, rents, and charges for the use of any building, facility, or property or any portion of a building, facility, or property owned or leased by the political subdivision in furtherance of a STAR bond project under this Act within a STAR bond district.

(i) To accept grants, guarantees, donations of property or labor, or any other thing of value for use in connection with a STAR bond project.

(j) To pay or cause to be paid STAR bond project costs, including, specifically, to reimburse any developer or nongovernmental person for STAR bond project costs incurred by that person. A political subdivision is not required to obtain any right, title, or interest in any real or personal property in order to pay STAR bond project costs associated with the property. The political subdivision shall adopt accounting procedures necessary to determine that the STAR bond project costs are properly paid.

(k) To exercise any and all other powers necessary to effectuate the purposes of this Act.

Section 75. The Illinois Municipal Code is amended by changing Section 8-4-1 as follows:

(65 ILCS 5/8-4-1) (from Ch. 24, par. 8-4-1)

Sec. 8-4-1. No bonds shall be issued by the corporate authorities of any municipality until the question of authorizing such bonds has been submitted to the electors of that municipality provided that notice of the bond referendum, if held before July 1, 1999, has been given in accordance with the provisions of Section 12-5 of the Election Code in effect at the time of the bond referendum, at least 10 and not more than 45 days before the date of the election, notwithstanding the time for publication otherwise imposed by Section 12-5, and approved by a majority of the electors voting upon that question. Notices required in connection with the submission of public questions on or after July 1, 1999 shall be as set forth in Section 12-5 of the Election Code. The clerk shall certify the proposition of the corporate authorities to the proper election authority who shall submit the question at an election in accordance with the general election law, subject to the notice provisions set forth in this Section.

Notice of any such election shall contain the amount of the bond issue, purpose for which issued, and maximum rate of interest.

However, without the submission of the question of issuing bonds to the electors, the corporate authorities of any municipality may authorize the issuance of any of the following bonds:

(1) Bonds to refund any existing bonded indebtedness;

(2) Bonds to fund or refund any existing judgment indebtedness;

(3) In any municipality of less than 500,000 population, bonds to anticipate the collection of installments of special assessments and special taxes against property owned by the municipality and to anticipate the collection of the amount apportioned to the municipality as public benefits under Article 9;

(4) Bonds issued by any municipality under Sections 8-4-15 through 8-4-23, 11-23-1 through 11-23-12, 11-25-1 through 11-26-6, 11-71-1 through 11-71-10, 11-74.3-1 through 11-74.3-7, 11-74.4-1 through 11-74.4-11, 11-74.5-1 through 11-74.5-15, 11-94-1 through 11-94-7, 11-102-1 through 11-102-10, 11-103-11 through 11-103-15, 11-118-1 through 11-118-6, 11-119-1 through 11-119-5, 11-129-1 through 11-129-7, 11-133-1 through 11-133-4, 11-139-1 through 11-139-12, 11-141-1 through 11-141-18 of this Code or 10-801 through 10-808 of the Illinois Highway Code, as amended;

(5) Bonds issued by the board of education of any school district under the provisions of Sections 34-30 through 34-36 of The School Code, as amended;

(6) Bonds issued by any municipality under the provisions of Division 6 of this Article 8; and by any municipality under the provisions of Division 7 of this Article 8; or under the provisions of Sections 11-121-4 and 11-121-5;

(7) Bonds to pay for the purchase of voting machines by any municipality that has adopted Article 24 of The Election Code, approved May 11, 1943, as amended;

(8) Bonds issued by any municipality under Sections 15 and 46 of the "Environmental Protection Act", approved June 29, 1970;

(9) Bonds issued by the corporate authorities of any municipality under the provisions of Section 8-4-25 of this Article 8;

(10) Bonds issued under Section 8-4-26 of this Article 8 by any municipality having a board of election commissioners;

(11) Bonds issued under the provisions of "An Act to provide the manner of levying or imposing taxes for the provision of special services to areas within the boundaries of home rule units and nonhome rule municipalities and counties", approved September 21, 1973;

(12) Bonds issued under Section 8-5-16 of this Code;

(13) Bonds to finance the cost of the acquisition, construction or improvement of water or wastewater treatment facilities mandated by an enforceable compliance schedule developed in connection with the federal Clean Water Act or a compliance order issued by the United States Environmental Protection Agency or the Illinois Pollution Control Board; provided that such bonds are authorized by an ordinance adopted by a three-fifths majority of the corporate authorities of the municipality issuing the bonds which ordinance shall specify that the construction or improvement of such facilities is necessary to alleviate an emergency condition in such municipality;

(14) Bonds issued by any municipality pursuant to Section 11-113.1-1;

(15) Bonds issued under Sections 11-74.6-1 through 11-74.6-45, the Industrial Jobs Recovery Law of this Code.

(16) Bonds issued under the STAR Bond Financing Act, except as may be required by Section 35 of that Act.

(Source: P.A. 90-706, eff. 8-7-98; 90-812, eff. 1-26-99; 91-57, eff. 6-30-99.)

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