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HB 2686

Trusts and pools; Oklahoma Trusts and Pools Act of 2025; effective date.

2025 Regular Session Introduced by Kyle Hilbert

IL HB 2686 makes certain sales-tax transfers irrevocable and ongoing, guaranteeing automatic funds to local governments and transit districts, limiting future budget reallocation.

Second Reading referred to Rules
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Bill Summary · HB 2686

Summary — HB 2686 (Revenue / Local Distributions)

Status: Enacted (signed by Governor 2025-06-20); listed effective date 2025-09-01 (see “Timing” below)
Primary sponsor: Rep. William "Will" Davis; Cosponsor: Rep. Camille Y. Lilly
Statutes amended: 30 ILCS 105/6z-17 (State Finance Act — State and Local Sales Tax Reform Fund) and 30 ILCS 115/1 and 115/2 (State Revenue Sharing Act — Local Government Distributive Fund)

Main purpose

HB 2686 changes how certain state sales-tax–related revenues are distributed to local governments and related funds and makes those distributions an irrevocable, continuing appropriation. In short, the bill locks in automatic transfers from the State and Local Sales Tax Reform Fund and the Local Government Distributive Fund to specified local and regional recipients and clarifies allocation mechanics.

Key provisions

  • Revises allocations from the State and Local Sales Tax Reform Fund (30 ILCS 105/6z-17):
    • Reiterates/clarifies percentage and destination allocations (examples in the statute include a municipal share, a transfer to the Regional Transportation Authority Occupation and Use Tax Replacement Fund, a 0.6% allocation for the Madison County Mass Transit District, transfers to the Build Illinois Fund, and the remainder to the Local Government Distributive Fund).
    • Provides for a monthly reduction to the fund distribution to cover transfers into a Tax Compliance and Administration Fund (amounts described as a percent of audited receipts).
  • Amends the State Revenue Sharing Act (30 ILCS 115/1 & /2) to address the timing and method of transfers into the Local Government Distributive Fund (procedural direction to the Department of Revenue, Treasurer, and Comptroller).
  • Critically, the bill expressly states that the specified distributions from the State and Local Sales Tax Reform Fund and from the Local Government Distributive Fund “shall constitute an irrevocable and continuing appropriation.” That changes these flows from discretionary appropriations to mandatory, ongoing transfers.
  • Includes language about the use of certain transferred moneys (for example, permitting municipalities to expend some shares on affordable housing programs — as reflected in statutory text).

Who is affected

  • Municipalities and counties that receive distributions (including municipalities with special allocations referenced in the statute).
  • Regional recipients such as the Regional Transportation Authority and Madison County Mass Transit District.
  • State funds: State and Local Sales Tax Reform Fund, Local Government Distributive Fund, Build Illinois Fund, Tax Compliance and Administration Fund.
  • State fiscal officers and administrators: Department of Revenue, State Treasurer, and Comptroller (involved in certification and transfer timing).
  • Indirectly, local programs funded by these distributions (e.g., transit, housing, local services).

Procedural / timing notes

  • Introduced in early February 2025. The legislative history shows passage in both chambers, enrollment, and the Governor’s signature on June 20, 2025.
  • The legislative actions attached to the bill record a stated effective date of September 1, 2025. (The bill text as introduced contains an “effective immediately” clause; the enacted law’s operative effective date should be confirmed in the enrolled act or state register.)
  • By converting these distributions to irrevocable, continuing appropriations, the bill reduces future legislative discretion over these specific transfers.

Potential fiscal and policy implications

  • Locks certain revenue flows to local governments and named funds, potentially limiting the General Assembly’s ability to reallocate those revenues in future budgets.
  • Provides greater predictability for local recipients (assured, automatic transfers).
  • May constrain state budget flexibility, particularly under fiscal stress, because transfers are mandatory rather than subject to annual appropriation.

For legal application or budget estimates, consult the enrolled law and the Illinois Comptroller/Department of Revenue guidance for the final effective date and implementation details.

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

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