(20 ILCS 620/3)
(from Ch. 67 1/2, par. 1003)
Sec. 3.
Definitions.
In this Act, words or terms shall have the following meanings unless the context or usage clearly indicates that another meaning is intended.
(a) "Department" means the Department of Commerce and Economic Opportunity.
(b) "Economic development plan" means the written plan of a municipality which sets forth an economic development program for an economic development project area. Each economic development plan shall include but not be limited to (1) estimated economic development project costs, (2) the sources of funds to pay such costs, (3) the nature and term of any obligations to be issued by the municipality to pay such costs, (4) the most recent equalized assessed valuation of the economic development project area, (5) an estimate of the equalized assessed valuation of the economic development project area after completion of an economic development project, (6) the estimated date of completion of any economic development project proposed to be undertaken, (7) a general description of any proposed developer, user, or tenant of any property to be located or improved within the economic development project area, (8) a description of the type, structure and general character of the facilities to be developed or improved in the economic development project area, (9) a description of the general land uses to apply in the economic development project area, (10) a description of the type, class and number of employees to be employed in the operation of the facilities to be developed or improved in the economic development project area, and (11) a commitment by the municipality to fair employment practices and an affirmative action plan with respect to any economic development program to be undertaken by the municipality.
(c) "Economic development project" means any development project in furtherance of the objectives of this Act.
(d) "Economic development project area" means any improved or vacant area which (1) is located within or partially within or partially without the territorial limits of a municipality, provided that no area without the territorial limits of a municipality shall be included in an economic development project area without the express consent of the Department, acting as agent for the State, (2) is contiguous, (3) is not less in the aggregate than three hundred twenty acres, (4) is suitable for siting by any commercial, manufacturing, industrial, research or transportation enterprise of facilities to include but not be limited to commercial businesses, offices, factories, mills, processing plants, assembly plants, packing plants, fabricating plants, industrial or commercial distribution centers, warehouses, repair overhaul or service facilities, freight terminals, research facilities, test facilities or transportation facilities, whether or not such area has been used at any time for such facilities and whether or not the area has been used or is suitable for other uses, including commercial agricultural purposes, and (5) which has been approved and certified by the Department pursuant to this Act.
(e) "Economic development project costs" mean and include the sum total of all reasonable or necessary costs incurred by a municipality incidental to an economic development project, including, without limitation, the following:
(1) Costs of studies, surveys, development of plans
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| and specifications, implementation and administration of an economic development plan, personnel and professional service costs for architectural, engineering, legal, marketing, financial, planning, police, fire, public works or other services, provided that no charges for professional services may be based on a percentage of incremental tax revenues; |
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(2) Property assembly costs within an economic |
| development project area, including but not limited to acquisition of land and other real or personal property or rights or interests therein, and specifically including payments to developers or other nongovernmental persons as reimbursement for property assembly costs incurred by such developer or other nongovernmental person; |
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(3) Site preparation costs, including but not limited |
| to clearance of any area within an economic development project area by demolition or removal of any existing buildings, structures, fixtures, utilities and improvements and clearing and grading; and including installation, repair, construction, reconstruction, or relocation of public streets, public utilities, and other public site improvements within or without an economic development project area which are essential to the preparation of the economic development project area for use in accordance with an economic development plan; and specifically including payments to developers or other nongovernmental persons as reimbursement for site preparation costs incurred by such developer or nongovernmental person; |
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(4) Costs of renovation, rehabilitation, |
| reconstruction, relocation, repair or remodeling of any existing buildings, improvements, and fixtures within an economic development project area, and specifically including payments to developers or other nongovernmental persons as reimbursement for such costs incurred by such developer or nongovernmental person; |
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(5) Costs of construction, acquisition, and operation |
| within an economic development project area of public improvements, including but not limited to, publicly owned buildings, structures, works, utilities or fixtures; provided that no allocation made to the municipality pursuant to subparagraph (A) of paragraph (2) of subsection (g) of Section 4 of this Act or subparagraph (A) of paragraph (4) of subsection (g) of Section 4 of this Act shall be used to operate a convention center or similar entertainment complex or venue; |
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(6) 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 hereunder which accrues during the estimated period of construction of any economic development project for which such obligations are issued and for not exceeding 36 months thereafter, and any reasonable reserves related to the issuance of such obligations; |
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(7) All or a portion of a taxing district's capital |
| costs resulting from an economic development project necessarily incurred or estimated to be incurred by a taxing district in the furtherance of the objectives of an economic development project, to the extent that the municipality by written agreement accepts and approves such costs; |
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(8) Relocation costs to the extent that a |
| municipality determines that relocation costs shall be paid or is required to make payment of relocation costs by federal or State law; |
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(9) The estimated tax revenues from real property in |
| an economic development project area acquired by a municipality which, according to the economic development plan, is to be used for a private use and which any taxing district would have received had the municipality not adopted tax increment allocation financing for an economic development project area and which would result from such taxing district's levies made after the time of the adoption by the municipality of tax increment allocation financing to the time the current equalized assessed value of real property in the economic development project area exceeds the total initial equalized value of real property in said area; |
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(10) Costs of job training, advanced vocational or |
| career education, including but not limited to courses in occupational, semi-technical or technical fields leading directly to employment, incurred by one or more taxing districts, provided that such costs are related to the establishment and maintenance of additional job training, advanced vocational education or career education programs for persons employed or to be employed by employers located in an economic development project area, and further provided that when such costs are incurred by a taxing district or taxing districts other than the municipality they shall be set forth in a written agreement by or among the municipality and the taxing district or taxing districts, which agreement describes the program to be undertaken, including but not limited to the number of employees to be trained, a description of the training and services to be provided, the number and type of positions available or to be available, itemized costs of the program and sources of funds to pay the same, and the term of the agreement. Such costs include, specifically, the payment by community college districts of costs pursuant to Sections 3-37, 3-38, 3-40 and 3-40.1 of the Public Community College Act and by school districts of costs pursuant to Sections 10-22.20a and 10-23.3a of the School Code; |
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(11) Private financing costs incurred by developers |
| or other nongovernmental persons in connection with an economic development project, and specifically including payments to developers or other nongovernmental persons as reimbursement for such costs incurred by such developer or other nongovernmental person, provided that: |
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(A) private financing costs shall be paid or |
| reimbursed by a municipality only pursuant to the prior official action of the municipality evidencing an intent to pay or reimburse such private financing costs; |
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(B) except as provided in subparagraph (D), the |
| aggregate amount of such costs paid or reimbursed by a municipality in any one year shall not exceed 30% of such costs paid or incurred by the developer or other nongovernmental person in that year; |
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(C) private financing costs shall be paid or |
| reimbursed by a municipality solely from the special tax allocation fund established pursuant to this Act and shall not be paid or reimbursed from the proceeds of any obligations issued by a municipality; |
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(D) if there are not sufficient funds available |
| in the special tax allocation fund in any year to make such payment or reimbursement in full, any amount of such interest cost remaining to be paid or reimbursed by a municipality shall accrue and be payable when funds are available in the special tax allocation fund to make such payment; and |
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(E) in connection with its approval and |
| certification of an economic development project pursuant to Section 5 of this Act, the Department shall review any agreement authorizing the payment or reimbursement by a municipality of private financing costs in its consideration of the impact on the revenues of the municipality and the affected taxing districts of the use of tax increment allocation financing. |
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(f) "Municipality" means a city, village or incorporated town.
(g) "Obligations" means any instrument evidencing the obligation of a municipality to pay money, including without limitation, bonds, notes, installment or financing contracts, certificates, tax anticipation warrants or notes, vouchers, and any other evidence of indebtedness.
(h) "Taxing districts" means counties, townships, municipalities, and school, road, park, sanitary, mosquito abatement, forest preserve, public health, fire protection, river conservancy, tuberculosis sanitarium and any other municipal corporations or districts with the power to levy taxes upon property located within the economic development project area.
(Source: P.A. 97-636, eff. 6-1-12 .) |
(20 ILCS 620/4)
(from Ch. 67 1/2, par. 1004)
Sec. 4.
Establishment of economic development project areas; ordinance; notice; hearing; changes in economic development plan.
Economic development project areas shall be established as follows:
(a) The corporate authorities of a municipality shall by ordinance propose the establishment of an economic development project area and fix a time and place for a public hearing, and shall submit a certified copy of the ordinance as adopted to the Department.
(b)(1) Notice of the public hearing shall be given by publication and mailing. Notice by publication shall be given by publication at least twice, the first publication to be not more than 30 nor less than 10 days prior to the hearing in a newspaper of general circulation within the taxing districts having property in the proposed economic development project area. Notice by mailing shall be given by depositing such notice together with a copy of the proposed economic development plan in the United States mails by certified mail addressed to the person or persons in whose name the general taxes for the last preceding year were paid on each lot, block, tract, or parcel of land lying within the economic development project area. The notice shall be mailed not less than 10 days prior to the date set for the public hearing. In the event taxes for the last preceding year were not paid, the notice shall also be sent to the persons last listed on the tax rolls within the preceding 3 years as the owners of such property.
(2) The notices issued pursuant to this Section shall include the following:
(A) The time and place of public hearing;
(B) The boundaries of the proposed economic
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| development project area by legal description and by street location where possible; |
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(C) A notification that all interested persons will |
| be given an opportunity to be heard at the public hearing; |
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(D) An invitation for any person to submit |
| alternative proposals or bids for any proposed conveyance, lease, mortgage or other disposition of land within the proposed economic development project area; |
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(E) A description of the economic development plan or |
| economic development project if a plan or project is a subject matter of the hearing; and |
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(F) Such other matters as the municipality may deem |
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(3) Not less than 30 days prior to the date set for hearing, the municipality shall give notice by mail as provided in this subsection (b) to all taxing districts, of which taxable property is included in the economic development project area, and to the Department. In addition to the other requirements under this subsection (b), the notice shall include an invitation to the Department and each taxing district to submit comments to the municipality concerning the subject matter of the hearing prior to the date of hearing.
(c) At the public hearing any interested person, the Department or any affected taxing district may file written objections with the municipal clerk and may be heard orally with respect to any issues embodied in the notice. The municipality shall hear and determine all alternate proposals or bids for any proposed conveyance, lease, mortgage or other disposition of land and all protests and objections at the hearing, and the hearing may be adjourned to another date without further notice other than a motion to be entered upon the minutes fixing the time and place of the adjourned hearing. Public hearings with regard to an economic development plan, economic development project area, or economic development project may be held simultaneously.
(d) At the public hearing or at any time prior to the adoption by the municipality of an ordinance approving an economic development plan, the municipality may make changes in the economic development plan. Changes which (1) alter the exterior boundaries of the proposed economic development project area, (2) substantially affect the general land uses established in the proposed economic development plan, (3) substantially change the nature of the proposed economic development project, (4) change the general description of any proposed developer, user or tenant of any property to be located or improved within the economic development project area, or (5) change the description of the type, class and number of employees to be employed in the operation of the facilities to be developed or improved within the economic development project area shall be made only after notice and hearing pursuant to the procedures set forth in this Section. Changes which do not (1) alter the exterior boundaries of a proposed economic development project area, (2) substantially affect the general land uses established in the proposed economic development plan, (3) substantially change the nature of the proposed economic development project, (4) change the general description of any proposed developer, user or tenant of any property to be located or improved within the economic development project area, or (5) change the description of the type, class and number of employees to be employed in the operation of the facilities to be developed or improved within the economic development project area may be made without further hearing, provided that the municipality shall give notice of its changes by mail to the Department and to each affected taxing district and by publication in a newspaper or newspapers of general circulation within the affected taxing districts. Such notice by mail and by publication shall each occur not later than 10 days following the adoption by ordinance of such changes.
(e) At any time within 30 days of the final adjournment of the public hearing, a municipality may, by ordinance, approve the economic development plan, establish the economic development project area, and authorize tax increment allocation financing for such economic development project area. Any ordinance adopted which approves an economic development plan shall contain findings that the developer or any of its successor entities and its subsidiaries shall create or retain not less than 4,250 full-time equivalent jobs, that private investment in an amount not less than $100,000,000 shall occur in the economic development project area, that the economic development project will encourage the increase of commerce and industry within the State, thereby reducing the evils attendant upon unemployment and increasing opportunities for personal income, and that the economic development project will increase or maintain the property, sales and income tax bases of the municipality and of the State. Any ordinance adopted which establishes an economic development project area shall contain the boundaries of such area by legal description and, where possible, by street location. Any ordinance adopted which authorizes tax increment allocation financing shall provide that the ad valorem taxes, if any, arising from the levies upon taxable real property in such economic development project area by taxing districts and tax rates determined in the manner provided in subsection (b) of Section 6 of this Act each year after the effective date of the ordinance until economic development project costs and all municipal obligations financing economic development project costs incurred under this Act have been paid shall be divided as follows:
(1) That portion of taxes levied upon each taxable |
| lot, block, tract or parcel of real property which is attributable to the lower of the current equalized assessed value or the initial equalized assessed value of each such taxable lot, block, tract or parcel of real property in the economic development project area shall be allocated to and when collected shall be paid by the county collector to the respective affected taxing districts in the manner required by law in the absence of the adoption of tax increment allocation financing. |
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(2) That portion, if any, of such taxes which is |
| attributable to the increase in the current equalized assessed valuation of each taxable lot, block, tract or parcel of real property in the economic development project area over and above the initial equalized assessed value of each property in the economic development project area shall be allocated to and when collected shall be paid to the municipal treasurer who shall deposit such taxes into a special fund called the special tax allocation fund of the municipality for the purpose of paying economic development project costs and obligations incurred in the payment thereof. |
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(f) After a municipality has by ordinance approved an economic development plan and established an economic development project area, the plan may be amended and the boundaries of the area may be altered only as herein provided. Amendments which (1) alter the exterior boundaries of an economic development project area, (2) substantially affect the general land uses established pursuant to the economic development plan, (3) substantially change the nature of the economic development project, (4) change the general description of any proposed developer, user, or tenant of any property to be located or improved within the economic development project area, or (5) change the description of the type, class and number of employees to be employed in the operation of the facilities to be developed or improved within the economic development project area, shall be made only after notice and hearing pursuant to the procedures set forth in this Section. Amendments which do not (1) alter the boundaries of the economic development project area, (2) substantially affect the general land uses established in the economic development plan, (3) substantially change the nature of the economic development project, (4) change the general description of any proposed developer, user, or tenant of any property to be located or improved within the economic development project area, or (5) change the description of the type, class and number of employees to be employed in the operation of the facilities to be developed or improved within the economic development project area may be made without further hearing, provided that the municipality shall give notice of any amendment by mail to the Department and to each taxing district and by publication in a newspaper or newspapers of general circulation within the affected taxing districts. Such notice by mail and by publication shall each occur not later than 10 days following the adoption by ordinance of any amendments.
(g) Extension of economic development project area; allocations; payment of outstanding claims; changes in equalized assessed valuation.
(1) Notwithstanding anything to the contrary set |
| forth in this Act, upon the effective date of this amendatory Act of the 97th General Assembly, the duration of any existing economic development plan created pursuant to this Act is extended to the duration permitted under this subsection, up to a maximum duration of 15 years. |
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(2) For the purposes of this Section, real estate |
| taxes paid on property within the economic development project area during calendar year 2013 and remitted to the developer and the taxing districts in 2014 shall be the "base amount". Beginning with real estate taxes remitted in 2014, for any economic development plan extended by operation of item (1) of this subsection (g), until such time as all existing obligations, as that term is defined in item (5) of this subsection (g), have been satisfied, the allocation of the special tax allocation fund shall be as follows: |
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(A) All receipts up to the first $350,000 shall |
| be maintained by the municipality in an escrow account to be used solely for (i) expenses relating to the reports required by Section 4.7 of this Act and (ii) legal expenses incurred in defense of any civil action brought against the municipality relating to the economic development agreement. The escrow account shall be within the scope of the annual audit provided in Section 4.7 of this Act. Each December 31 following a deposit into the escrow account, any unobligated balance in the escrow account shall be distributed to the taxing districts in the same manner and proportion as the most recent distribution by the county collector to the taxing districts in the economic development project area. |
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(B) After the allocation required pursuant to |
| paragraph (A) of this item (2), the next $5,000,000 of the receipts shall be allocated to the municipality. |
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(C) After the allocations required pursuant to |
| paragraphs (A) and (B) of this item (2), 55% of the remaining receipts shall be allocated to the developer. |
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(D) After the allocations required pursuant to |
| parts (A) and (B) of this item (2), 45% of the remaining receipts shall be allocated to the taxing districts located within the economic development project area, excluding the municipality. |
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(3) For real estate taxes paid in 2012 and remitted |
| to the developer and the taxing districts in 2013 and prior years, the allocation formula contained in any economic development plan in effect immediately prior to the effective date of this amendatory Act of the 97th General Assembly shall apply. |
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(4) Beginning with real estate taxes paid in 2014 and |
| remitted to the developer and the taxing districts in 2015 and each year thereafter, if the taxes paid within the economic development project area change from the base amount, the allocation of the special tax allocation fund shall be as follows: |
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(A) If the amount of current year taxes paid is |
| less than the base amount, then the administrative escrow account shall receive the first $350,000 of receipts, the municipality shall receive the next $5,000,000 of receipts, the developer shall receive 55% of receipts over $5,350,000, and the remaining 45% of receipts over $5,350,000 shall be distributed to the taxing districts (excluding the municipality) in the same manner and proportion as the most recent distribution by the county collector to those taxing districts in the economic development project area. |
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(B) If the amount of current year taxes paid is |
| greater than the base amount, then 75% of the increase in real estate tax receipts shall be payable to the developer and the remaining 25% of the increase in real estate tax receipts shall be distributed to the taxing districts (including the municipality) pursuant to the formula in this subsection. |
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(5) After (i) all existing obligations and interest |
| thereon have been satisfied, (ii) any excess moneys have been distributed pursuant to this subsection, and (iii) final closing of the books and records of the economic development project area has occurred, the municipality shall adopt an ordinance dissolving the special tax allocation fund for the economic development project area and terminating the designation of the economic development project area as an economic development project area. All excess moneys in the special tax allocation fund shall be distributed to the taxing districts in the same manner and proportion as the most recent distribution by the county collector to those taxing districts in the economic development project area. For the purpose of this subsection (g), "existing obligations" means (i) the obligations of the developer that existed before the base year, as certified by a sworn affidavit of the principal financial officer of the developer attesting that the amounts set forth are true and correct, (ii) obligations of the municipality relating to the payment of the obligations of the developer, and (iii) any amounts payable by taxing districts to the developer for property taxes determined to have been overpaid, to the extent that those amounts payable have been carried forward as an interest bearing note due to the developer. All obligations of the developer due and payable shall be processed and paid in the order received, with the oldest notes to be processed and paid first. Beginning January 1, 2012, all outstanding interest bearing notes shall bear interest at the rate of 4% until paid. |
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(h) Beginning on the effective date of this amendatory Act of the 97th General Assembly, the taxing districts shall meet annually 180 days after the close of the municipal fiscal year, or as soon as the economic development project audit for that fiscal year becomes available, to review the effectiveness and status of the economic development project area up to that date.
(Source: P.A. 97-636, eff. 6-1-12 .) |
(20 ILCS 620/4.7)
Sec. 4.7.
Municipal reports.
After the effective date of this amendatory Act of the 97th General Assembly, a municipality shall submit in an electronic format all of the following information for each economic development project area (i) to the State Comptroller and (ii) to all taxing districts overlapping the economic development project area no later than 180 days after the close of each municipal fiscal year or as soon thereafter as the audited financial statements become available:
(1) Any amendments to the economic development plan
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| or the economic development project area. |
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(2) Audited financial statements of the special tax |
| allocation fund once a cumulative total of $100,000 has been deposited into the fund. |
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(3) Certification of the Chief Executive Officer of |
| the municipality that the municipality has complied with all of the requirements of this Act during the preceding fiscal year. |
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(4) An opinion of legal counsel that the municipality |
| is in compliance with this Act. |
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(5) An analysis of the special tax allocation fund |
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(A) the balance in the special tax allocation |
| fund at the beginning of the fiscal year; |
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(B) all amounts deposited in the special tax |
| allocation fund by source; |
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(C) an itemized list of all expenditures from the |
| special tax allocation fund by category of permissible economic development project cost; and |
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(D) the balance in the special tax allocation |
| fund at the end of the fiscal year, including a breakdown of that balance by source and a breakdown of that balance identifying any portion of the balance that is required, pledged, earmarked, or otherwise designated for payment of or securing of obligations and anticipated economic development project costs; any portion of that ending balance that has not been identified or is not identified as being required, pledged, earmarked, or otherwise designated for payment of or securing of obligations or anticipated economic development project costs shall be designated as surplus as set forth in Section 8 of this Act. |
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(6) A description of all property purchased by the |
| municipality within the economic development project area including: |
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(A) street address;
(B) approximate size or description of property;
(C) purchase price; and
(D) the seller of the property.
(7) A statement setting forth all activities |
| undertaken in furtherance of the objectives of the economic development plan, including: |
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(A) any project implemented in the preceding |
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(B) a description of the economic development |
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(C) a description of any agreements entered into |
| by the municipality with regard to the disposition or redevelopment of any property within the economic development project area; |
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(D) additional information on the use of all |
| funds received under this Act and steps taken by the municipality to achieve the objectives of the economic development plan; |
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(E) information regarding contracts that the |
| municipality's tax increment advisors or consultants have entered into with entities or persons that have received, or are receiving, payments financed by tax increment revenues produced by the same economic development project area; and |
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(F) a review of public and, to the extent |
| possible, private investment actually undertaken on or after the effective date of this amendatory Act of the 97th General Assembly and prior to the date of the report and estimated to be undertaken during the following fiscal year; this review shall, on a project by project basis, set forth the estimated amounts of public and private investment incurred after the effective date of this amendatory Act of the 97th General Assembly and provide the ratio of private investment to public investment to the date of the report and as estimated to the completion of the economic development project. |
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(8) With regard to any obligations issued by the |
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(A) copies of any official statements; and
(B) an analysis prepared by a financial advisor |
| or underwriter setting forth: (i) the nature and term of those obligations; and (ii) projected debt service including required reserves and debt coverage. |
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(9) For special tax allocation funds that have |
| experienced cumulative deposits of incremental tax revenues of $100,000 or more, a certified audit report reviewing compliance with this Act performed by an independent certified public accountant licensed by the authority of the State of Illinois. The financial portion of the audit must be conducted in accordance with Standards for Audits of Governmental Organizations, Programs, Activities, and Functions adopted by the Comptroller General of the United States (1981), as amended, or the standards specified by Section 8-8-5 of the Illinois Municipal Auditing Law of the Illinois Municipal Code. The audit report shall contain a letter from the independent certified public accountant indicating compliance or noncompliance with the requirements of subsection (e) of Section 3 of this Act. |
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(10) A list of all intergovernmental agreements in |
| effect during the fiscal year to which the municipality is a party and an accounting of any moneys transferred or received by the municipality during that fiscal year pursuant to those intergovernmental agreements. |
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(Source: P.A. 97-636, eff. 6-1-12 .) |