September 30th Deadline for Submitting TIF District Student Reimbursement Claims Approaching

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September 30th is the final date for school districts to submit a claim for reimbursement to their local municipalities for students residing in local tax increment financing (TIF) districts.  Under the Tax Increment Allocation Development Act (the ‘TIF Act’), a school district is entitled to a payment from the TIF district for increased costs attributable to housing units located within the redevelopment area that have received financial assistance from the TIF district.  The size of the payment depends on the number of students residing in the TIF area, the type of school district (elementary, high school, or unit), and the category of State Aid the school district receives.

Section 11-74.4-3(q)(7.5) of the TIF Act provides that a school district seeking a student reimbursement payment must between July 1 and September 30 of each year provide the municipality with ‘reasonable evidence’ to support its claim for reimbursement before the municipality is required to make any payment.  Reasonable evidence is generally considered to be the initials of the student, the student’s address within the TIF district and year in school, and the school district’s per pupil tuition cost less any increase in State aid attributable to the added new students.  Failure to seek reimbursement during the three month period constitutes a forfeiture of any claim for reimbursement for that year.

There are approximately 1,400 TIF districts in Illinois. According to the most recent Illinois Department of Revenue data (2019), the total incremental taxes raised by these TIF districts exceeds $1.7 billion.  For TIF districts that include residential housing units that received assistance from the TIF district, in most cases the local school districts are entitled to a payment for the students living within these units. 

We urge you to carefully review the TIF districts overlapping your school district boundaries and determine whether there are any students attending your district’s schools who reside in the TIF area(s).  If there are students residing in the TIF area, the school district has until September 30th to submit a claim for reimbursement to the municipality operating the TIF district.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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