HB4366 104TH GENERAL ASSEMBLY

LRB104 15704 HLH 29838 b

104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
HB4366

Introduced 1/14/2026, by Rep. Hoan Huynh

SYNOPSIS AS INTRODUCED:

New Act
5 ILCS 100/5-45.71 new
30 ILCS 105/5.1038 new

Creates the Billionaire Hedge Fund Fee Act. Imposes a fee on each covered transaction occurring on or after July 1, 2026. Provides that the amount of the fee shall be the base amount with respect to the covered transaction, multiplied by 0.002. Provides that the term "covered transaction" means: (1) the purchase by a United States person of a security if the purchase occurs on, or is subject to the rules of, the Chicago Board Options Exchange or the Chicago Mercantile Exchange; or (2) the purchase by a United States person of a derivative if the derivative is traded on, or is subject to the rules of, the Chicago Board Options Exchange or the Chicago Mercantile Exchange. Specifies that, for purposes of the Act, "United States person" includes controlled foreign corporations, hedge funds, and private equity funds and their officers and employees. Exempts from the provisions of the Act the purchase of a security or a derivative by an individual for that individual's personal investment account or personal investment portfolio. Provides that the proceeds from the tax imposed under the Act shall be deposited into the Reducing the Cost of Living Fund. Amends the Illinois Administrative Procedure Act. Grants emergency rulemaking powers to the Department of Revenue. Amends the State Finance Act. Create the Reducing the Cost of Living Fund. Effective immediately.

A BILL FOR

AN ACT concerning revenue.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 1. Short title. This Act may be cited as the Billionaire Hedge Fund Fee Act.

Section 5. Definitions. As used in this Act:

"Base amount" means:

(1) in the case of a security, the fair market value of the security determined as of the time of the covered transaction; and

(2) in the case of any payment with respect to a derivative, the amount of the payment.

"Controlled foreign corporation" has the meaning given to that term in Section 957 of the federal Internal Revenue Code of 1986.

"Covered transaction" means:

(1) the purchase by a United States person of a security if the purchase occurs on, or is subject to the rules of, a qualified board or exchange; or

(2) the purchase by a United States person of a derivative if the derivative is traded on, or is subject to the rules of, a qualified board or exchange.

"Department" means the Department of Revenue.

"Derivative" means any contract (including any option, forward contract, futures contract, short position, swap, or similar contract) the value of which, or any payment or other transfer with respect to which, is (directly or indirectly) determined by reference to one or more of the following:

(1) any share of stock in a corporation;

(2) any partnership or beneficial ownership interest in a partnership or trust;

(3) except as provided in Section 15, any evidence of indebtedness;

(4) any real property;

(5) any commodity that is actively traded;

(6) any currency;

(7) any rate, price, amount, index, formula, or algorithm; or

(8) any other item designated by the Department.

"Hedge fund" has the meaning given in 12 U.S.C. 1851(h)(2).

"Private equity fund" has the meaning given in 12 U.S.C. 1851(h)(2).

"Qualified board or exchange" means the Chicago Board Options Exchange or the Chicago Mercantile Exchange.

"Security" means:

(1) any share of stock in a corporation;

(2) any partnership or beneficial ownership interest in a partnership or trust; or

(3) except as provided in Section 15, any note, bond, debenture, or other evidence of indebtedness.

"United States person" has the meaning given to that term in Section 7701 of the federal Internal Revenue Code of 1986. "United States person" also includes controlled foreign corporations, hedge funds, and private equity funds and their officers and employees.

Section 10. Fee imposed; amount of fee. There is hereby imposed a fee on each covered transaction occurring on or after July 1, 2026. The amount of the fee shall be the base amount with respect to the covered transaction, multiplied by 0.002.

Section 15. Exceptions. No fee shall be imposed under this Act:

(1) on any covered transaction involving the initial public offering of any security; or

(2) on any covered transaction involving a note, bond, debenture, or other evidence of indebtedness that has a fixed maturity of not more than 100 days.

No fee is imposed under this Act upon the privilege of engaging in a business in interstate commerce or otherwise when the business may not, under the Constitution and statutes of the United States, be made the subject of taxation by this State.

Section 25. Collection by qualified board or exchange. The fee imposed by this Act shall be collected by the qualified board or exchange from the purchaser and shall be remitted to the Department monthly in the form and manner required by the Department.

Section 30. Fee administered by the Department of Revenue; deposit into the Reducing the Cost of Living Fund.

(a) The fee imposed under this Act, and all civil penalties that may be assessed as an incident thereof, shall be administered, collected, and enforced by the Department. The Department has full power to administer and enforce this Act, to collect all fees and penalties due under this Act, to dispose of fees and penalties so collected as provided in this Act, and to determine all rights to credit memoranda arising on account of the erroneous payment of a fee or penalty under this Act.

(b) The Department of Revenue shall pay over to the State Treasurer all moneys remitted to the Department under this Act for deposit into the Reducing the Cost of Living Fund, a special fund created in the State treasury. Subject to appropriation, moneys in the Reducing the Cost of Living Fund shall be used as follows:

(1) $5,000,000,000 shall be used in each State fiscal year by the State Board of Education to make grants to school districts in exchange for a corresponding reduction in the school districts' property tax levies;

(2) $800,000,000 shall be used in each State fiscal year by the Department of Healthcare and Family Services to provide reimbursement to healthcare providers for Medicaid services and for Medicaid premium reductions; and

(3) in each State fiscal year, the State Comptroller shall order transferred and the State Treasurer shall transfer from the Reducing the Cost of Living Fund to the Road Fund the amount of $1,000,000,000;

(4) $1,000,000,000 shall be used in each State fiscal year by the Department of Transportation to make grants to mass transit districts; and

(5) the remainder shall be used in each State fiscal year to provide stimulus payments, in accordance with rules adopted by the Department of Commerce and Economic Opportunity, to Illinois residents who (i) have dependent children under the age of 18 during the taxable year or (ii) own a single family homes or a residential dwelling with 6 units or less.

Section 35. Recordkeeping. Each qualified board or exchange shall keep records and books of all transactions giving rise to a fee under this Act. Those books and records shall be kept in the English language and shall, at all times during business hours of the day, be subject to inspection by the Department or its duly authorized agents and employees.

Section 40. Retailers' Occupation Tax Act and Uniform Penalty and Interest Act adopted. The provisions of Sections 4, 5, 5f, 5i, 6, 6a, 6b, 6c, 8, 9, 10, and 12 of the Retailers' Occupation Tax Act which are not inconsistent with this Act, and Section 3-7 of the Uniform Penalty and Interest Act, shall apply as far as practicable to the subject matter of this Act to the same extent as if those provisions were included in this Act.

Section 42. Exemption. Notwithstanding any other provision of this Act, this Act does not apply to the purchase of a security or a derivative by an individual exclusively for that individual's personal investment account or personal investment portfolio.

Section 45. Rules. The Department shall adopt administrative rules to implement and administer this Act. Initial rules may be adopted as emergency rules.

Section 900. The Illinois Administrative Procedure Act is amended by adding Section 5-45.71 as follows:

(5 ILCS 100/5-45.71 new)

Sec. 5-45.71. Emergency rulemaking; Billionaire Hedge Fund Fee Act. To provide for the expeditious and timely implementation of the Billionaire Hedge Fund Fee Act, emergency rules implementing the Billionaire Hedge Fund Fee Act may be adopted in accordance with Section 5-45 by the Department of Revenue. The adoption of emergency rules authorized by Section 5-45 and this Section is deemed to be necessary for the public interest, safety, and welfare.

This Section is repealed one year after the effective date of this amendatory Act of the 104th General Assembly.

Section 905. The State Finance Act is amended by adding Section 5.1038 as follows:

(30 ILCS 105/5.1038 new)

Sec. 5.1038. The Reducing the Cost of Living Fund.

Section 999. Effective date. This Act takes effect upon becoming law.