Industrial revenue bonds in Illinois
Volume cap, active issuers, the local buyer base and the steps to finance a manufacturing, recycling, water or housing project in Illinois with tax-exempt bonds.
State facts verified October 2026Key takeaways
- $1.7B of volume cap in 2026 — the federal $135 per resident applied to 12.72 million residents; rank 6 of 51 by size.
- 31 Illinois issuer entries appear in SEC-registered fund holdings, $181.1M in total, −$43.7M over the latest quarter (filers report some issuers under more than one name).
- 282 FDIC-insured banks headquartered in the state hold $13.7B of municipal securities — the natural direct purchasers for small issues.
- No single-state municipal fund focuses on this state (single-state funds exist mainly where residents pay state income tax), so placements rely on national high-yield funds, banks and separately managed accounts.
Issuers whose bonds funds already hold
Registered funds’ holdings show which Illinois issuers buyers already know. The tables cover all conduit and private activity issuers in fund holdings — including transportation, housing, nonprofit and pollution-control issuers — so they are context for demand, not a list of issuers that do manufacturing bonds.
| Series | Held | Change |
|---|---|---|
| Eastern Illinois Economic Development Authority | $26.2M | +$18.4M |
| Illinois (State of) Development Finance Authority (CITGO Petroleum Corp.) | $23.6M | +$8K |
| Illinois Finance Authority, Solid Waste Revenue Bonds, LRS Holdings LLC Project, Series 2023B | $19.3M | +$12.0M |
| Southwestern Illinois Development Authority, Environmental Improvement Revenue Bonds, US Steel Corporation Project, Series 2012 | $15.0M | +$139K |
The local buyer base
Banks
282 FDIC-insured banks are headquartered in Illinois, together holding $13.7B of municipal securities in the latest call reports. Banks often buy small industrial issues outright (direct purchase) or provide letters of credit that let money market funds buy variable-rate bonds.
Funds
National high-yield municipal funds are the core buyers of unrated industrial bonds. No single-state fund focuses on the state.
How Illinois allocates volume cap
Allocating agency: Office of the Governor - Governor's Office of Management and Budget, Capital Markets Unit (under the Illinois Private Activity Bond Allocation Act, 30 ILCS 345). The 2026 state ceiling of $1,715,871,330 ($135 x 12,710,158) is split by statute: $1,107,388,260 to home rule units (each gets $135 x its population and tracks its own cap through May 1), $304,241,535 to non-home rule units and $304,241,535 to state agencies such as the Illinois Finance Authority. Requests go to the Governor's Office by email and hard copy with an Allocation Request Letter and a copy of the official action (inducement resolution); all requests received on an opening day count as equally first, then first come, first granted; local units are limited to 10% of their pool per project, and local allocation letters are valid 60 days (home rule: or to December 27, whichever is first). Unreserved home rule cap reverts to the Governor's Office on June 1 and remaining non-home rule cap on July 15; state agencies may carry forward with Governor's Office approval.
State allocation fees. No state allocation fee is stated in the 2026 Governor's Office guidelines. Illinois Finance Authority fee schedule (as of July 14, 2026) for Industrial Development Bonds (Small Issue Manufacturing Bonds): $1,500 application fee; closing fee of 50 basis points on par up to $10 million plus 25 basis points on par above $10 million, plus a Volume Cap Fee of 5 basis points of volume cap allocated by IFA less any Reservation Fee (non-refundable 2.5 basis points of the requested cap, payable with the application); no annual fee. Exempt facility bonds: $1,500 application, 50 basis points closing (maximum $250,000) plus the Volume Cap Fee.
Next published date: December 27, 2026 — Latest expiry of home rule allocation letters (58 days from this page’s build). All states’ dates
| Milestone | Date |
|---|---|
| Non-home rule units may request from the Local Government Pool (from 8:30 a.m.) | January 3, 2026 |
| Home rule units may not apply to the State; they manage their own cap | January 2 - May 1, 2026 |
| Home rule reservation cutoff; unreserved cap goes to the Governor's Office | May 1, 2026 |
| Home rule mid-year report of cap granted, transferred or reserved | by May 10, 2026 |
| Home Rule Pool reallocation opens; half available to home rule units under 2,000,000 (from 8:30 a.m.) | June 1, 2026 |
| Remaining non-home rule cap reserved to the Governor's Office; Home Rule and Non-Home Rule Pools open to local units and state agencies (from 8:30 a.m.) | July 15, 2026 |
| Latest expiry of home rule allocation letters | December 27, 2026 |
| Confirmation of Bond Issuance (with IRS 8038) due after any issuance | within 10 calendar days of issuance |
Issuers that do manufacturing bonds
| Issuer | Type |
|---|---|
| Illinois Finance Authority | statewide authority |
State approvals
Every allocation request must include a copy of the issuer's official action (inducement resolution or similar) as defined in the Illinois Allocation Act, and the request letter certifies under penalty of perjury that issuance is not made in consideration of any bribe, gift or political contribution. The issuer must file a Confirmation of Bond Issuance with IRS Form 8038 with the Governor's Office within 10 calendar days of issuance; non-home rule units may not reallocate cap and must use it within their jurisdiction.
Incentives that commonly stack with the bonds
3 state programmes verified on official pages. Eligibility and amounts are set by each programme; the bonds do not confer them.
- Sales taxStatewide manufacturing machinery and equipment sales tax exemption, claimed with Illinois Department of Revenue Form ST-587.
- Sales taxIllinois Enterprise Zone Program (DCEO): building materials exemption from retailers' occupation tax, expanded sales tax exemption for manufacturing property and a state utility tax exemption for certified projects, plus local zone incentives.
- IncentiveCook County Class 6b: industrial property assessed at 10% of market value for ten years, renewable for further ten-year periods (otherwise 15% in year 11 and 20% in year 12).
Who to call
- Governor's Office of Management and Budget, Capital Markets Unit - Volume Cap Submission, (312) 814-0023
- Illinois Finance Authority Public Finance Group, (312) 651-1300
Sources: capitalmarkets.illinois.gov (1) · capitalmarkets.illinois.gov (2) · il-fa.com (1) · il-fa.com (2) · il-fa.com (3) · tax.illinois.gov · dceo.illinois.gov · prodassets.cookcountyassessoril.gov · checked October 2026. Procedures and fees change; confirm with the agency and bond counsel.
Not found on an official page yet: a published figure for cap remaining. We leave these out rather than estimate; ask the allocating agency.
How to finance a project in Illinois
- Confirm eligibility. Manufacturing projects up to $10 million under the small-issue capital expenditure election, or an exempt facility such as solid waste, water or qualified housing. See the guide.
- Choose an issuer. In Illinois, issuers with published industrial bond programs include Illinois Finance Authority (see the issuer table above). A county or city industrial development authority, a port authority or a statewide finance authority can serve; the fund-holdings tables are context, not a directory. How to choose an issuer.
- Obtain a declaration of official intent (inducement resolution). Costs paid up to 60 days before it, and any time after, can be reimbursed from bond proceeds (Treas. Reg. §1.150-2).
- Apply for volume cap to the state’s allocating agency, Office of the Governor. Illinois’s 2026 ceiling is $1.7B; allocation is at the state’s discretion, by round, lottery or first-come, and the ceiling is not the amount still available.
- Hold the TEFRA hearing after at least seven days’ public notice (the issuer’s website may be used) and obtain the elected official’s approval. If the issuer sits outside the project’s jurisdiction, an elected official of the host jurisdiction must also approve; approval lapses if bonds are not issued within a year.
- State approvals, documents and closing. Some states add their own steps — attorney general review, court validation or a state commission’s approval. Bond counsel drafts the documents; a bank buys the bonds directly or a placement agent places them with investors.
The order of these steps varies by state: some require the public hearing and local approval before they allocate volume cap.
Questions borrowers ask
Do industrial revenue bonds in Illinois need volume cap?
Most do. Federal law (IRC §146) requires small-issue manufacturing bonds and most exempt-facility bonds to receive an allocation of the state’s annual cap, which for Illinois is $1.7B this year. Governmentally owned airports, docks and solid waste facilities, and qualified 501(c)(3) bonds, do not.
Who issues industrial revenue bonds in Illinois?
Issuers with published industrial bond programs in Illinois include Illinois Finance Authority. County and city development authorities, port authorities and statewide finance authorities issue depending on the state, and national conduits can issue with the host jurisdiction’s approval. The allocating agency (Office of the Governor) can confirm who is active.
Who buys Illinois industrial revenue bonds?
National high-yield municipal funds, banks — including the 282 headquartered in the state — insurers and separately managed accounts.
How long does it take?
Typically three to six months from engagement to closing; volume cap rounds and issuer board calendars can add time.
Check whether your project qualifies Read the complete guide
Methodology
Volume cap is the 2026 federal formula — $135 per resident with a $397,625,000 small-state minimum (Rev. Proc. 2025-32) — applied to Census Vintage 2025 population estimates; where a state publishes its own figure, the state’s figure governs. It is the annual ceiling, not the amount still available. Issuer and bond figures are holdings reported by SEC-registered funds on Form N-PORT, classified by Securitief; bank figures are municipal securities in FDIC call reports for banks headquartered in the state.
Important information. Securitief Research is published by Securitief, operated by Applied America. Securitief is not a placement agent or underwriter and does not seek or receive compensation from any financing, including financings of issuers and borrowers discussed here. It is not acting as a municipal advisor and owes no fiduciary duty to any issuer or obligated person unless separately engaged in writing.
This material is general information. It is not tax, legal, investment or municipal advice, a recommendation, or an offer to sell or a solicitation of an offer to buy any security. Offers are made only by offering documents and only where permitted by state securities laws. State allocation procedures change; confirm current rules with the allocating agency and bond counsel.
Sources: SEC Form N-PORT and FDIC call reports (holdings), IRS and Census (volume cap and population), state agency publications. Issuer classification and aggregation are Securitief’s own and may contain matching errors; figures may be revised. No licensed index levels (MMD, BVAL, ICE) or EMMA trade data are used. Past holdings do not indicate future demand, pricing or the availability of financing. Interest on private activity bonds may be subject to the alternative minimum tax; tax treatment depends on the facts and the opinion of bond counsel.