Bill
HB 2789
Illinois would freeze property assessments for mega projects (≥$500M) during an incentive period in exchange for negotiated local payments.
Status / Intro
- Bill: HB 2789 — PROP TX‑MEGA PROJECT
- Introduced: February 2025 (introduced version shows Rep. Mary Beth Canty)
- Key action: Amends Illinois Property Tax Code by adding Division 22 (Mega project property).
- Effective date stated in bill: June 1, 2025.
Purpose
- Create a new statutory framework to encourage very large capital investments (“mega projects”) in Illinois by providing an assessment freeze (limiting increases in property valuation due to the project) in exchange for negotiated payments to the local government. Law is intended to reduce tax-driven barriers to large-scale investment and to promote local economic development.
Key provisions
- New title: “Mega Project Assessment Freeze and Payment Law” (adds Division 22 to Article 10 of 35 ILCS 200).
- Assessment freeze: If the Department of Revenue certifies property as “mega project property,” then during the incentive period the value added by the mega project is excluded from assessments; the property’s total valuation is capped at the “base year valuation.”
- Definitions and thresholds:
- “Mega project” requires a minimum investment of at least $500,000,000 in eligible costs within the investment period.
- “Eligible costs” are broadly defined (purchase, site preparation, construction, equipment, capitalized costs, infrastructure, financing costs, R&D, job training, relocation, certain remediation costs, etc.) and may include costs incurred up to 5 years before the municipal ordinance approving the incentive agreement.
- “Investment period” generally ends 7 years after Department issuance of the mega project certificate (municipality and company may agree to a longer initial period subject to limits).
- “Incentive period” begins on Jan 1 following the year the project is placed in service and continues until the earlier of the incentive agreement’s expiration or revocation of the certificate.
- Certification & approvals:
- Department of Revenue issues a “mega project certificate.”
- A local municipality and the company enter an “incentive agreement” that obligates the company to make a negotiated “special payment” (in addition to property taxes) during the incentive period.
- The local review board must approve the base year used for the valuation cap.
- Parties defined: “Company” may include multiple entities and affiliates that together meet the investment threshold; “assessment officer” refers to the county’s chief assessment officer.
Who is affected
- Large developers/companies planning or financing projects with aggregate eligible costs ≥ $500M.
- Local municipal governments that negotiate incentive agreements.
- County assessment officers, Department of Revenue, and local taxing districts (school districts, municipalities, counties) that may see reduced assessed value growth for the project during the incentive period.
- Potential indirect impacts on local revenue and service funding, depending on negotiated special payments.
Procedural/timeline notes
- Certification and incentive agreements are prerequisites to receiving the assessment freeze; investment and incentive periods are time‑limited.
- Eligible costs can include expenditures up to 5 years before municipal approval.
- Effective date in the bill: June 1, 2025.
Potential impacts / considerations
- Revenue: Taxing districts may experience lower property tax growth from certified projects during the incentive period; impacts depend on the size of negotiated special payments and other revenue arrangements.
- Development: May make Illinois more competitive for very large capital projects by reducing property tax exposure on added value.
- Oversight: Relies on Department certification, municipal negotiation, and local review board approval; the exact fiscal tradeoffs depend on incentive agreement terms (not prescribed by the bill).
Note on document sources
- The provided file also contained an unrelated Arizona bill (also numbered HB 2789) about elevator requirements on tall construction projects. This summary focuses only on the Illinois Property Tax (mega project) provisions.
Compiled from official sources — confirm details with the bill’s official record.
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