HB3151 Summary

• Amends the Illinois Income Tax Act Section 901 to establish a new transfer mechanism to the Local Government Distributive Fund if the income tax rate is reduced due to the state exceeding its spending limit.

• If a tax rate reduction occurs under Section 201.5, beginning with the first distribution after the reduction takes effect, the State Comptroller and Treasurer must transfer 1/10 of net monthly income tax revenue to the Local Government Distributive Fund.

• This transfer provision overrides previous percentage-based allocations that were scheduled to change on February 1, 2025, and continues until the spending limit reduction is repealed or modified.

• Effective immediately upon becoming law.