HB2789 creates a new property tax incentive program in the Illinois Property Tax Code for qualifying “mega project” developments. The bill defines a mega project as a large-scale investment meeting specified requirements, including at least $500 million in eligible costs within the investment period. For projects certified by the Department of Revenue, the bill provides an assessment freeze during the incentive period: the added value from the project is excluded from assessment, and the property’s taxable valuation is limited to the base year valuation.
To receive the benefit, a company must enter into an incentive agreement with the local municipality and obtain approval through a local review board process involving affected taxing districts, including school and park districts. The agreement must require annual special payments to the municipality, which are then distributed to affected taxing districts in proportion to their tax shares. The bill also requires a project labor agreement, sets a minimum 20-year operating commitment, allows for extensions of the investment period, and includes reporting, certification, revocation, and rulemaking provisions administered by the Department of Revenue.
Impact
HB2789 would add a new Division 22 to Article 10 of the Property Tax Code, establishing the “Mega Project Assessment Freeze and Payment Law.” It would change how certain large industrial or commercial properties are assessed for property tax purposes by freezing assessed value at the base year during the incentive period, while also creating a parallel special-payment structure to compensate local governments and taxing districts. The bill also addresses transfers, financing arrangements, abatements, bond-limit calculations, and enforcement mechanisms tied to certification and termination of the incentive agreement.
Sentiment
Based on the bill text and the absence of committee testimony or recorded votes in the provided materials, the measure appears designed as an economic development incentive intended to attract very large capital investments to Illinois. The findings section frames the bill positively, emphasizing competitiveness with other states, reduced barriers to investment, and local economic benefits. No contrary public sentiment is reflected in the provided record, but the structure of the bill suggests it was crafted to balance business incentives with local revenue protections.
Contention
The main points of potential contention are the property tax freeze itself, the long duration of the incentive agreement, and the size of the qualifying investment threshold. Local school districts and other taxing districts may be concerned about foregone tax growth, even though the bill requires special payments and review-board approval. Another likely issue is whether the required special payments and local approval process adequately protect public revenues and whether the 20-year operating commitment and 23-to-40-year agreement term are sufficient safeguards for communities. The bill also requires a 20% contract goal for minority-owned businesses and a project labor agreement, which may be viewed as important protections by supporters but as added conditions by some business interests.