STAR Bonds

Under the Statewide Innovation Development and Economy Act, units of local government may issue Sales Tax and Revenue (STAR) bonds to assist with the development of approved projects that will have positive economic outcomes and generate new jobs within eligible areas of the state.

Units of local government must first establish, via resolution, a STAR bond district. These districts must be located in a contiguous area with at least 10,000 residents within a 5-mile radius that is located no more than 15 miles from either a state highway or federal interstate. At least 50% of this area must be located within an underserved area at the time the district plan is submitted.

After a STAR bond district is approved, units of local government may submit a STAR bond project. Projects are intended to bolster significant economic activity and job creation, while promoting major tourism, entertainment, and retail. The Act excludes projects related to professional sports stadiums.

The establishment of a STAR bond district and a New Opportunities for Vacation and Adventure (NOVA) district follow the same process listed above. However, a project in a standard STAR bond district requires a developer to make a minimum capital investment of $30 million on the project, have $60 million in projected annual gross sales, and be projected to create 300 new full-time jobs.

A project in a NOVA district requires a developer to make a minimum capital investment of $500 million, have $300 million in projected annual gross sales, and be projected to create 1,500 new full-time jobs.

Yes, the Act sets limitations on bonding for a project. These limits are dependent on which type of district these projects will be located in:

• Projects located in STAR bond districts are limited to 50% of total development costs or $75 million, which ever is less.
• Projects located in NOVA districts are limited to the lesser of 50% of the total development costs or $800 million, whichever is less.

There are limitations on the number of projects that may be located in each of the State's 10 economic development regions. These limitations are based upon population:

• Regions with a population of less than 600,000: 1 project per region
• Regions with a population of between 600,000 and 999,999: 3 projects per region
• Regions with a population of 1 million or more: 4 projects per region

Neither a STAR bond nor a NOVA district may be located, either entirely or partially, inside of a municipality with more than 2 million residents.

Only project costs incurred after the establishment of a STAR bond district may be eligible. These generally include:

• Pre-construction and design costs
• Land acquisition/demolition, clearing, and grading of land
• Improvements to public infrastructure
• Some employee training costs
• Other limited costs reasonably necessary for the success of the project

Project costs do not include:

• Construction costs on public buildings leased to project participants
• Moving expenses
• Property taxes
• General overhead/administrative costs

Interested municipalities and counties must meet the following deadlines:

• June 1, 2026: Notification of intent to establish STAR bond district submitted to the Illinois Department of Commerce and Economic Opportunity (DCEO) and the Illinois Department of Revenue (IDOR).  Submit your notification of intent to ceo.starbonds@illinois.gov.
• January 1, 2027: STAR bond district plan proposals and related required support documentation must be submitted to DCEO, IDOR and the Governor's Office of Management and Budget (GOMB).
• June 1, 2028: Proposed STAR bond project plans and related required support documentation must be submitted to DCEO, IDOR and GOMB. Work must commence within three years of State approval.