MUNI CD-EMS VEHICLE FUNDS

104th Regular Session Introduced by John Cabello and 29 co-sponsors

Illinois cities with 500,000+ people must set aside 10% of private-insurer payments for ambulance/fire services to buy and maintain emergency vehicles.

Public Act . . . . . . . . . 104-0258

Main purpose

Require large Illinois municipalities to reserve a fixed portion of private-insurer payments received for ambulance or fire services and limit use of those funds to acquisition and upkeep of emergency service vehicles (ambulances, fire engines, and similar vehicles). The law aims to create a dedicated, ongoing funding stream for emergency vehicles.

Key provisions

Adds Section 11-6.1.5 to the Illinois Municipal Code (65 ILCS 5).

Applicability: a municipality with a population of more than 500,000 (i.e., largest Illinois cities).

Set‑aside requirement: the municipality must set aside 10% of the funds it receives from private insurers as direct payment for ambulance or fire services provided by the municipality.

Permitted uses: set‑aside funds may be used only for purchasing or maintaining ambulances, fire engines, and other vehicles used to provide emergency services.

Exemptions: the requirement does NOT apply to funds received through (i) public health programs (including Medicaid and Medicare) or (ii) reimbursements for liability claims, settlements, or judgments (including payments from excess insurers or self‑insurance reserves).

Who is affected

Directly: municipalities in Illinois with population >500,000 (the primary practical example is the City of Chicago).

Indirectly: private insurers that make direct payments to those municipalities for ambulance and fire services (because 10% of such payments must be set aside by the municipality), municipal budgets and departments that operate emergency vehicles, and residents relying on emergency medical and fire services (through potential capital and maintenance impacts).

Funds from public payers (Medicaid/Medicare) and liability reimbursements are excluded.

Procedural / timeline notes

Passed both chambers in May 2025 (concurrence on Senate amendments); transmitted to Governor 06/24/2025; approved 08/15/2025.

Effective date: January 1, 2026.

During floor/committee consideration, amendments at one point added language about a dedicated account and a state preemption on inconsistent home‑rule regulations; the final enacted text prescribes the 10% set‑aside and permitted uses with the exemptions noted above.

Possible impacts and considerations

Intended to ensure a predictable revenue stream for vehicle acquisition/maintenance, potentially reducing deferred vehicle replacement and improving emergency response readiness.

Constrains municipal discretion over insurer-derived funds (earmarking 10% for vehicles), which could reduce flexibility for other emergency-service or general fund needs.

Limited geographic scope (applies only to very large municipalities), so statewide fiscal impact is narrow.

Implementation questions municipalities may need to address: accounting treatment, whether to place funds in a separately identified/dedicated account (best practice though not explicitly required in the final text), and administrative procedures to track private‑insurer direct payments.

Bill