50 ILCS 475/5-10

(50 ILCS 475/5-10)

Sec. 5-10. Definitions. In this Act:

"Base year" means the calendar year immediately before the calendar year in which the Office of the Governor approves the first STAR bond project within the STAR bond district.

"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 that a reasonable person would recognize as being done with the intention and purpose to continue work until the project is completed.

"Corporate authority" or "corporate authorities" means the county board of a county; the mayor and alderpersons or similar body when the reference is to cities; the president and trustees or similar body when the reference is to villages or incorporated towns; and the council when the reference is to municipalities under the commission form of government.

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

"Department" means the Department of Commerce and Economic Opportunity.

"Developer" means any individual, corporation, trust, estate, partnership, limited liability partnership, limited liability company, or other entity. "Developer" does not include a not-for-profit entity, political subdivision, or other agency or instrumentality of the State.

"Development user" means an owner, operator, licensee, codeveloper, subdeveloper, or tenant that: (i) operates a business within a STAR bond district that is a retail store, hotel, or entertainment venue; (ii) does not have another Illinois location within a 30-mile radius at the time of opening; and (iii) makes an initial capital investment, including project costs and other direct costs, of not less than $30,000,000 for the business.

"Director" means the Director of Commerce and Economic Opportunity.

"Economic development region" means the counties encompassed within any one of the 10 economic development regions recognized by the Department on the effective date of this Act.

"Eligible area" means contiguous parcels of real property that meet all of the following: (i) the property is directly and substantially benefited by the proposed STAR bond district plan; (ii) at least 50% of the total land area of the real property is located within an underserved area, as defined by the Department at the time the STAR bond district plan is submitted; (iii) the property is located in an area with not less than 10,000 residents within a 5-mile radius of the proposed district; (iv) the property is located 15 miles or less from either a State highway or federal interstate highway; and (v) the area is found by the governing body of the political subdivision to meet the following requirements:

(1) the use, condition, and character of the buildings in the area, if any, are not consistent with the purposes set forth in Section 5-5;

(2) a STAR bond district within the area is expected to create or retain job opportunities within the political subdivision;

(3) a STAR bond district within the area will serve to further the development of adjacent areas;

(4) without the availability of STAR bonds, the projects described in the STAR bond district plan would not be feasible in the area;

(5) a STAR bond district will strengthen the commercial sector of the political subdivision;

(6) a STAR bond district will enhance the tax base of the political subdivision; and

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

The findings described in paragraphs (1) through (7) are subject to the review process provided in subsections (e) and (f) of Section 5-20.

For the purposes of this definition, the area may be bisected by streets, highways, roads, alleys, railways, bike paths, streams, rivers, and other waterways and still be deemed contiguous.

"Entertainment venue" means a business that has a primary use of providing a venue for entertainment attractions, rides, or other activities oriented toward the entertainment and amusement of its patrons.

"Feasibility study" means the feasibility study described in subsection (b) of Section 5-30.

"Hotel" has the same meaning given to that term in Section 2 of the Hotel Operators' Occupation Tax Act.

"Infrastructure" means the public improvements and private improvements that serve the public purposes set forth in Section 5-5 of this Act and that benefit the STAR bond district or any STAR bond projects, including, but not limited to, streets, drives and driveways, traffic and directional signs and signals, parking lots and parking facilities, interchanges, highways, sidewalks, bridges, underpasses and overpasses, bike and walking trails, sanitary storm sewers and lift stations, drainage conduits, channels, levees, canals, storm water detention and retention facilities, utilities and utility connections, water mains and extensions, and street and parking lot lighting and connections.

"Local sales taxes" means any locally imposed taxes received by a municipality, county, or other local governmental entity arising from sales by retailers and servicemen within a STAR bond district. "Local sales taxes" includes business district sales taxes, taxes imposed under Section 5-50, and that portion of the net revenue allocated from the Local Government Tax Fund and the County and Mass Transit District Fund to the municipality, county, or other governmental entity under the Retailers' Occupation Tax Act, the Use Tax Act, the Service Use Tax Act, and the Service Occupation Tax Act from transactions at places of business located in a STAR bond district. "Local sales taxes" does not include (i) any taxes authorized under the Local Mass Transit District Act or the Metro-East Park and Recreation District Act for so long as the applicable taxing district does not impose a tax on real property, (ii) any county school facility and resources occupation taxes imposed under Section 5-1006.7 of the Counties Code, (iii) any taxes authorized under the Flood Prevention District Act, (iv) any taxes authorized under the Special County Occupation Tax For Public Safety, Public Facilities, Mental Health, Substance Abuse, or Transportation Law, (v) any taxes authorized under the Regional Transportation Authority Act, (vi) any taxes authorized under the County Motor Fuel Tax Law, or (vii) any taxes authorized under the Municipal Motor Fuel Tax Law.

"Local sales tax increment" means:

(1) with respect to local sales taxes administered by a municipality, county, or other unit of local government, that portion of the local sales tax that is in excess of the aggregate local sales tax in the district for the same month in the base year, as determined by the respective municipality, county, or other unit of local government; the Department of Revenue shall allocate the local sales tax increment only if the local sales tax is administered by the Department; and

(2) with respect to local sales taxes administered by the Department of Revenue:

(A) except with respect to the 0.25% county portion of the 6.25% State rate, all the local sales tax paid by taxpayers in the district that is in excess of the aggregate local sales tax paid by taxpayers in the district for the same month in the base year, as determined by the Department of Revenue; and

(B) with respect to the 0.25% county portion of the 6.25% State rate, in the case of a STAR bond district that is partially or wholly within a municipality, that portion of the 0.25% county portion of the 6.25% rate paid by taxpayers in the district for sales made within the corporate limits of the municipality that is in excess of the aggregate local sales tax paid by taxpayers in the district for sales made within the corporate limits of the municipality for the same month in the base year, as determined by the Department of Revenue, but only if the corporate authorities of the county adopt an ordinance, and file a copy of the ordinance with the Department of Revenue within the same time frames as required for STAR bond occupation taxes under Section 5-50, that designates the taxes as part of the local sales tax increment under this Act.

"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 after the term of repayment of STAR bonds.

"Master developer" means a developer cooperating with a political subdivision to plan, develop, and implement a STAR bond project plan for a STAR bond district. Subject to the limitations of Section 5-40, 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 or its affiliate 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 developer" also means any successor developer who has assumed the role and responsibilities of the original master developer through the execution of an amended master development agreement and has been approved as the master developer through resolution by the applicable political subdivision.

"Master development agreement" means an agreement between the master developer (or any approved successor developers) 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.

"New Opportunities for Vacation and Adventure District" or "NOVA district" means a STAR bond district that encompasses a minimum of 500 contiguous acres and, during the STAR bond district plan approval process, demonstrates a reasonable expectation of (1) producing a capital investment of at least $500,000,000, (2) generating not less than $300,000,000 in annual gross sales, (3) attracting at least 1,000,000 visitors annually, and (4) creating a minimum of 1,500 jobs.

"Pledged STAR revenues" means those sales tax revenues and other sources of funds that are pledged to pay debt service on STAR bonds or to pay project costs under Section 5-45. Notwithstanding any provision of law to the contrary, any State sales tax increment or local sales tax increment from a retail entity initiating operations in a STAR bond district while terminating operations at another Illinois location within 25 miles of the STAR bond district shall not constitute pledged STAR revenues or be available to pay principal and interest on STAR bonds. For purposes of this definition, "terminating operations" means a closing of a retail operation that is directly related to the opening of the same operation or like retail entity owned or operated by more than 50% of the original ownership in a STAR bond district within one year before or after initiating operations in the STAR bond district, but it does not mean closing an operation for reasons beyond the control of the retail entity, as documented by the retail entity, subject to a reasonable finding by the municipality (or county if such retail operation is not located within a municipality) in which the terminated operations were located that the closed location contained inadequate space, had become economically obsolete, or was no longer a viable location for the retailer or serviceperson.

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

"Professional sports" means any of the following sports at the major league level: baseball, basketball, football, or ice hockey.

"Project costs" means the total of all costs incurred or estimated to be incurred on or after the date of establishment of a STAR bond district that are reasonable or necessary to implement a STAR bond district plan or any STAR bond project plans, or both, including costs incurred for public improvements and private improvements that serve the public purposes set forth in Section 5-5 of this Act. "Project costs" includes, without limitation:

(1) costs of studies, surveys, development of plans and specifications, formation, implementation, and administration of a STAR bond district, STAR bond district plan, any STAR bond projects, or any STAR bond project plans, including, but not limited to, staff and professional service costs for architectural, engineering, legal, financial, planning, or other services; however, no charges for professional services may be based on a percentage of the tax increment collected, and no contracts for professional services, excluding architectural and engineering services, may be entered into if the terms of the contract extend beyond a period of 3 years;

(2) property assembly costs, including, but not limited to, costs related to:

(A) the acquisition of land and other real property or rights or interests in the land or other real property located within the boundaries of a STAR bond district;

(B) the demolition of buildings, site preparation, and site improvements that serve as an engineered barrier addressing ground level or below ground environmental contamination, including, but not limited to, parking lots and other concrete or asphalt barriers; and

(C) the clearing and grading of land and the importing of additional soil and fill materials or the removal of soil and fill materials from the site;

(3) subject to paragraph (6), the costs of buildings and other vertical improvements that are located within the boundaries of a STAR bond district and are owned by a political subdivision or other public entity, including without limitation police and fire stations, educational facilities, and public restrooms and rest areas;

(4) costs of buildings and other vertical improvements that are located within: (i) the boundaries of a STAR bond district and are owned by a development user, except that only 4 development users, other than a hotel or entertainment venue, in a STAR bond district and one hotel are eligible to include the cost of those vertical improvements as project costs, or (ii) the boundaries of a NOVA district;

(5) costs of the following vertical improvements that are located within (i) the boundaries of a STAR bond district and owned by an entertainment venue, except that only one entertainment venue in a STAR bond district is eligible to include the cost of those vertical improvements as project costs, or (ii) a NOVA district:

(A) buildings;

(B) rides and attractions, including, but not limited to, carousels, slides, roller coasters, displays, models, towers, works of art, and similar theme and amusement park improvements; and

(C) other vertical improvements;

(6) costs of the design and construction of infrastructure and public works located within the boundaries of a STAR bond district that are reasonable or necessary to implement a STAR bond district plan or any STAR bond project plans, or both, except that "project costs" does not include the cost of constructing a new municipal public building principally used to provide offices, storage space, or conference facilities or vehicle storage, maintenance, or repair for administrative, public safety, or public works personnel and that is not intended to replace an existing public building unless the political subdivision makes a reasonable determination in a STAR bond district plan or any STAR bond project plans, supported by information that provides the basis for that determination, that the new municipal building is required to meet an increase in the need for public safety purposes anticipated to result from the implementation of the STAR bond district plan or any STAR bond project plans;

(7) costs of the design and construction of the following improvements located outside the boundaries of a STAR bond district if the costs are essential to further the purpose and development of a STAR bond district plan and either (i) part of and connected to sewer, water, or utility service lines that physically connect to the STAR bond district or (ii) significant improvements for adjacent off-site highways, streets, roadways, and interchanges that are approved by the Department of Transportation. No other cost of infrastructure and public works improvements located outside the boundaries of a STAR bond district may be deemed project costs;

(8) costs of job training and retraining projects for current and future employees of development users, including programs implemented by businesses located within a STAR bond district;

(9) financing costs, including, but not limited to, all necessary and incidental expenses related to the issuance of obligations and the payment of interest on any obligations issued under this Act, including interest accruing during the estimated period of construction of any improvements in a STAR bond district or any STAR bond projects for which such obligations are issued and for not exceeding 36 months thereafter and including reasonable reserves related thereto;

(10) interest costs incurred by a developer for project costs related to the acquisition, formation, implementation, development, construction, and administration of a STAR bond district, STAR bond district plan, STAR bond projects, or any STAR bond project plans if:

(A) payment of the costs in any one year may not exceed 30% of the annual interest costs incurred by the developer with regard to the STAR bond district or any STAR bond projects during that year; and

(B) the total of the interest payments paid under this Act may not exceed 30% of the total cost paid or incurred by the developer for a STAR bond district or STAR bond projects, plus project costs, excluding any property assembly costs incurred by a political subdivision under this Act;

(11) to the extent the political subdivision by written agreement accepts and approves the same, all or a portion of a taxing district's capital costs resulting from a STAR bond district or STAR bond projects necessarily incurred or to be incurred within a taxing district in furtherance of the objectives of a STAR bond district plan or STAR bond project plans;

(12) costs of common areas located within the boundaries of a STAR bond district;

(13) costs of landscaping and plantings, retaining walls and fences, artificial lakes and ponds, shelters, benches, lighting, and similar amenities located within the boundaries of a STAR bond district;

(14) costs of mounted building signs, site monuments, and pylon signs located within the boundaries of a STAR bond district; or

(15) if included in the STAR bond district plan and approved in writing by the Director, salaries or a portion of salaries for local government employees to the extent the same are directly attributable to the work of those employees on the establishment and management of a STAR bond district or any STAR bond project.

Except as specified in items (1) through (15) of this definition, "project costs" does not include:

(A) the cost of construction of buildings that are owned by a municipality or county and leased to a development user for uses other than as a retail store, hotel, or entertainment venue;

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

(C) property taxes for property located in the STAR bond district;

(D) lobbying costs; and

(E) general overhead or administrative costs of the political subdivision that would still have been incurred by the political subdivision if the political subdivision had not established a STAR bond district.

"Project development agreement" means any one or more agreements, including any amendments to that agreement or those agreements, between a master developer and any codeveloper or subdeveloper in connection with a STAR bond project, which project development agreement may include the political subdivision as a party.

"Project labor agreement" means a prehire collective bargaining agreement that covers all terms and conditions of employment between the general contractor and all subcontractors hired by the master developer, developer, codeveloper, or subdeveloper, as applicable, of a STAR bond project. A "project labor agreement" must include the following provisions: (1) a provision establishing the minimum hourly wage for each class of labor organization employee; (2) a provision establishing the benefits and other compensation for each class of labor organization employee; (3) a provision requiring that no strike or dispute will be engaged in by the labor organization employees; (4) a provision requiring that no lockout or dispute will be engaged in by the general contractor and all subcontractors building the project; and (5) a provision establishing goals for apprenticeship hours to be performed by minority persons and women and goals for total hours to be performed by minority persons and women, as those terms are defined in the Business Enterprise for Minorities, Women, and Persons with Disabilities Act. A "project labor agreement" may include other terms and conditions as necessary.

"Projected market area" means any area within the State in which a STAR bond district or STAR bond project is projected to have a significant fiscal or market impact as determined by the Director.

"Resolution" means a resolution, order, ordinance, or other appropriate form of legislative action of a political subdivision or other applicable public entity approved by a vote of a majority of a quorum at a meeting of the governing body of the political subdivision or applicable public entity.

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

"STAR bond district" means the specific area that is declared to be an eligible area by the political subdivision, that has received approval by the State, and 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 that is located within a STAR bond district and that is approved under Section 5-30.

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

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

"State sales tax" means all the net revenue realized under the Retailers' Occupation Tax Act, the Use Tax Act, the Service Use Tax Act, and the Service Occupation Tax Act from transactions at places of business located within a STAR bond district, excluding that portion of the net revenue realized under the Retailers' Occupation Tax Act, the Use Tax Act, the Service Use Tax Act, and the Service Occupation Tax Act from transactions at places of business located within a STAR bond district that is deposited into the Local Government Tax Fund and the County and Mass Transit District Fund.

"State sales tax increment" means:

(1) with respect to all STAR bond districts that do not qualify as NOVA districts:

(A) 100% of that portion of the aggregate State sales tax that is in excess of the aggregate State sales tax for the same month in the base year, as determined by the Department of Revenue, from transactions at up to 4 development users located within a STAR bond district, which development users shall be designated by the master developer and approved by the political subdivision and the Director of Revenue in conjunction with the applicable STAR bond project approval; and

(B) 25% of that portion of the aggregate State sales tax that is in excess of the aggregate State sales tax for the same month in the base year, as determined by the Department of Revenue from all other transactions within a STAR bond district; and

(2) with respect to all NOVA districts:

(A) 100% of that portion of the State sales tax that is in excess of the State sales tax for the same month in the base year, as determined by the Department of Revenue, from transactions at up to 4 development users located, which development users shall be designated by the master developer and approved by the political subdivision and the Director of Revenue in conjunction with the applicable STAR bond project approval; and

(B) 50% of that portion of the State sales tax that is in excess of the State sales tax for the same month in the base year from all other transactions within the NOVA district.

"Substantial change" means a change in which the proposed STAR bond project plan differs substantially in size, scope, or use from the approved STAR bond district plan or STAR bond project plan.

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

"Total development costs" means the aggregate public and private investment in a STAR bond district, including project costs and other direct and indirect costs related to the development of the STAR bond district.

"Underserved area" has the meaning given to that term in Section 5-5 of the Economic Development for a Growing Economy Tax Credit Act.

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

(Source: P.A. 104-453, eff. 12-12-25.)