Summary of SB2298

and its diminishment of TIFs that are currently used.

• Amends the Tax Increment Allocation Redevelopment Act of the Illinois Municipal Code.
• Adds two factors to the determination of a “blighted area” for improved, industrial, commercial, and residential buildings or improvements:
  (i) if the redevelopment project area has had an annual average unemployment rate of at least 120% of the State’s annual average unemployment rate;
  (ii) if the redevelopment project area has a poverty rate of at least 20%, 50% or more of children in the redevelopment project area participate in the federal free lunch program, or 20% or more households in the redevelopment project area receive food stamps.
• Removes or modifies various factors from the definitions of “blighted area” and “conservation area” for improved and vacant areas.
• Provides that a new redevelopment project shall have a completion date no later than December 31st of the 10th year after the ordinance was adopted (rather than the 23rd year) and may be extended to 15 years (rather than 35 years).
• Provides that the joint review board and municipality shall approve surplus funds and extensions of redevelopment project area completion dates.
• Provides that surplus funds shall be distributed annually within 90 days (rather than 180 days) after the close of a municipality’s fiscal year.
• Provides that a new or modified redevelopment project area that overlaps with any existing redevelopment project area shall not be approved.

Effective July 1, 2021

Fundamental Changes in Designation As Well as Duration

The bill makes fundamental changes not fully captured by the public summary which emphasizes the added criteria, shortened life, and surplus distribution changes. They are major:

• Adds two factors as described below: Unemployment and Poverty added to the definition of Blight but not Conservation
• Deletes: Dilapidation, Deterioration, Code Standards, Excessive Vacancies, Lack of Ventilation etc, Deleterious Land Use or Layout and Lack of Community Planning
• Tightens: Lack of Growth of EAV to require an absolute decline in three of the past five years
• Leaves Available Factors: Obsolescence, Illegal Use, Inadequate Utilities (but doesn’t add Broadband or Fiber as a utility), Excessive Land Coverage, Environment and the modified EAV factor.
• With Regard to Vacant Land, Removes: Obsolete Platting, Diversity of Ownership, Adjacent Deterioration and Blighted Prior to Becoming Vacant and leaves Tax and Special Assessment Delinquency, Environmental, EAV Decline (absolute) and the balance of the one factor tests.

It retains the requirement of 5 factors to establish blight so it is now five of 8 available factors and Age plus 3 of 6 available factors for Conservation. The addition of the two new factors is positive, but the removal and restriction of the others and reduction of time would dramatically change TIF as we know it.