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HB 5166

DISSOLVE SPECIAL DISTRICTS ACT

104th Regular Session Introduced by Chris Balkema and 4 co-sponsors

The bill creates a two-step process for dissolving drainage and sanitary districts in mid-to-large counties, transferring assets, liabilities, and services to a receiving unit.

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Bill Summary · HB 5166

Bill Summary: HB 5166 (104th Illinois General Assembly)

Purpose and Intent

  • Establishes a process to dissolve certain drainage and sanitary districts in a specific population range.
  • Targeted counties: municipalities with more than 650,000 but fewer than 1,000,000 inhabitants.
  • The bill creates parallel dissolution procedures for two types of special districts: drainage districts under the Illinois Drainage Code and sanitary districts under the Sanitary District Act of 1936.

Key Provisions

1) Dissolution of Drainage Districts (70 ILCS 605/10-3.5 new)

  • Scope: Applies to drainage districts in counties with 650,000–999,999 residents.
  • Definitions:
    • Date of dissolution: when the district is dissolved.
    • Dissolving drainage district: the district being dissolved.
    • Receiving unit of local government: entity to which rights, duties, and liabilities transfer.
    • Governing body: includes the district board, municipal corporate authorities, township board, or county board.
  • Process (two-step voting requirement):
    • Step 1: Vote by the dissolving district’s governing body to dissolve on a specified date and transfer rights/duties/liabilities to a receiving unit on or before a specified date.
    • Step 2: Vote by the receiving unit’s governing body to receive those rights/duties/liabilities on or before a specified date.
  • Transfer of assets and liabilities:
    • All real/personal property, assets, personnel, obligations, and liabilities transfer to the receiving unit on or before the dissolution date.
    • After dissolution, the receiving unit may exercise the district’s rights/duties.
  • Service continuity plan:
    • Before dissolution, the receiving unit must submit a plan showing it can continue providing the district’s services.
  • Tax and reporting requirements:
    • Within 30 days after dissolution, the district must provide a certified copy of the dissolution ordinance/resolution to the Department of Revenue and the applicable counties.
    • The receiving unit must also provide a certified copy of its ordinance/resolution approving receipt/assumption within 30 days of when it will receive the rights/liabilities.

2) Dissolution of Sanitary Districts (70 ILCS 2805/33.2 new)

  • Scope: Applies to sanitary districts in counties with 650,000–999,999 residents.
  • Definitions mirror those for drainage districts (date of dissolution, dissolving sanitary district, receiving unit, governing body).
  • Process (two-step voting requirement), asset transfer, and transition of rights/duties are analogous to the drainage-district provisions.
  • Service continuity plan and tax-reporting requirements are identical in structure to the drainage-district provisions:
    • 30-day reporting to Department of Revenue and local taxing authorities after dissolution.
    • 30-day reporting to the Department of Revenue and local authorities after the receiving unit approves the transfer.

Who Would Be Affected

  • Current drainage and sanitary districts located in the specified population-range counties.
  • Governing bodies of those districts (to initiate dissolution) and the receiving units of local government (cities, towns, townships, or counties that would absorb the district).
  • Department of Revenue and local counties/taxing authorities (submission of dissolution documents and post-transition tax notices).
  • District employees and contractors (as there would be transfer of assets, personnel, and liabilities).

Procedural and Timeline Aspects

  • Requires affirmative votes from both:
    • The dissolving district’s governing body (to dissolve by a specified date and transfer rights/liabilities).
    • The receiving unit’s governing body (to receive rights/liabilities by a specified date).
  • Transfers occur on or before the specified dissolution date.
  • Service continuation plans must be prepared and approved before dissolution.
  • Certification requirements: within 30 days of dissolution and within 30 days of receiving unit approval.
  • Effective date: Act takes effect upon becoming law.

Effective Date

  • Section 99: General effective date is upon becoming law.

Observations

  • The bill formalizes a structured, two-party agreement process for dissolution, emphasizing continuity of services and financial/liability transitions.
  • It targets harmonization within mid-to-large population counties, potentially reducing redundant governance in certain districts.
  • Administrative requirements are designed to ensure tax and asset/liability transitions are documented and reportable to the state and counties.

Compiled from official sources — confirm details with the bill’s official record.

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