Thursday, February 26th, 2015

Proposed Change to Special Service Areas

Currently, the Illinois Legislature is faced with a bill that could affect the law concerning Special Service Area taxes. Specifically, this proposed law would allow municipalities to establish “Green Special Service Areas.” The purpose of such areas would be to arrange for and finance energy efficiency improvements, renewable energy improvements, or water use improvements. The financing of either of these shall constitute a public purpose. Such a law could provide beneficial infrastructure for both municipalities and green-minded citizens.

Interestingly, these green special service areas would only include property where the owner has consented to the property being included in the area, either by contract or agreement with the municipality. If the owner has consented to being within the Green Special Service Area, the municipality can then levy a special service area tax on the property owners. Additionally, if a green special service area is created, municipalities would then have the power to:

  • issue special service area bonds
  • sell or assign those bonds to the Illinois Finance Authority
  • assign or pledge those special service area bonds, agreements relating to special service area projects, or both to the Illinois Finance Authority.

While there may be some hurdles in establishing a Green Special Service Area, this law could provide beneficial improvements to municipalities, while also appealing to people and businesses with a green focus.

Michael J. Smoron

Authors: Michael J. Smoron, Jacob Caudill