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HB 2463

Virginia Community College System; certain dual enrollment instructors.

2025 Regular Session Introduced by Phil Scott

Shifts Illinois income tax receipts from the GRF to LGDF, phasing to 10% by 2028 for individuals and electing pass-throughs, boosting local government funding while reducing GRF.

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Bill Summary · HB 2463

Summary — HB 2463 (Title: INC TX‑LGDF TRANSFERS)

Status: Referred to Rules Committee
Introduced: February 4–5, 2025
Classification: Bill
Effective date: Effective immediately (per bill synopsis)

Note: The provided document mixes text from two different measures both labeled "HB 2463." This summary focuses on the Illinois measure titled “INC TX‑LGDF TRANSFERS” (amendment to 35 ILCS 5/901). The document also contains unrelated Arizona bill text; that Arizona content is not summarized here.

Purpose and intent

The bill amends Section 901 of the Illinois Income Tax Act (35 ILCS 5/901) to increase the monthly percentage of certain income tax receipts that the State Treasurer transfers from the General Revenue Fund (GRF) to the Local Government Distributive Fund (LGDF). The intent is to raise the share of income-tax-derived revenues routed to local governments over a multi-year schedule, ultimately reaching 10% for specified taxpayer classes.

Key provisions

  • Modifies subsection (b) (Local Government Distributive Fund) to change the monthly transfer percentages from the GRF to the LGDF according to a multi‑year schedule.
  • Establishes different percentage rates by taxpayer type (individuals, trusts and estates; corporations; electing pass‑through entities) for specified date ranges:
    • July 1, 2025 – June 30, 2026: individuals/trusts/estates and pass‑throughs — 8.5%; corporations — 9.355%.
    • July 1, 2026 – June 30, 2027: individuals/trusts/estates and pass‑throughs — 9.0%; corporations — 9.57%.
    • July 1, 2027 – June 30, 2028: individuals/trusts/estates and pass‑throughs — 9.5%; corporations — 9.785%.
    • Beginning July 1, 2028: individuals and electing pass‑through entities — 10.0% (the bill text also indicates 10% for the corresponding individual tax base); (corporate percentage at/near 10% under phased increases).
  • Retains and references earlier transfer percentages for past and interim periods (the bill replaces or clarifies several historical percentages that governed transfers in earlier years).
  • Defines “net revenue realized for a month” as the revenue from the income taxes deposited into specified State funds during that month, minus the amount paid out of the GRF that same month as refunds issued by State warrants for overpayment of those taxes.

Who is affected

  • Local governments: would receive larger monthly distributions from the LGDF as transfers increase.
  • State General Revenue Fund: would have correspondingly reduced monthly receipts available for state programs/expenses because a larger share is shifted to the LGDF.
  • No change to the statutory tax rates or taxpayer liabilities; this is a reallocation of where existing income tax receipts are deposited.
  • The Department of Revenue and State Treasurer would implement the changed transfer mechanics.

Fiscal implications

  • Increases LGDF inflows over time, improving revenue available to local units of government.
  • Reduces amounts retained in the GRF, potentially affecting state budget balances, appropriation capacity, and funding of state programs (net impact depends on overall revenue levels and state budget choices).
  • The bill’s built‑in phased schedule moderates the fiscal shift across multiple fiscal years.

Procedural / timeline notes

  • Introduced in early February 2025; status in the provided record is “Referred to Rules Committee.”
  • The bill text states “Effective immediately,” meaning, if enacted, the changes would take immediate effect consistent with the effective‑date language in the Act (subject to standard enactment procedures).

Sponsors

Primary sponsor(s) as listed in the document: Kyle Moore and Stephanie Stahl Hamilton. Additional cosponsors are listed in the provided materials.

Additional note

The provided legislative packet also contained an unrelated Arizona bill (also labeled HB 2463) concerning repeal of an Arizona telemedicine statute; that is a separate measure and is not part of this Illinois income‑tax/LGDF reallocation bill.

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

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