(60 ILCS 1/280-20)

Sec. 280-20. Form of refunding bonds; use of tax proceeds.

(a) The refunding bonds shall be of a form and denomination, payable at a place, bear a date, and be executed by officials as provided by the corporate authorities of the township in the bond ordinance. They shall mature within not more than 20 years from their date and may be made callable on any interest payment date at par and accrued interest after notice has been given at the time and in the manner provided in the bond ordinance.

(b) If there is no default in payment of the principal of or interest upon the refunding bonds and if, after setting aside a sum of money equal to the amount of interest that will accrue on the refunding bonds and a sum of money equal to the amount of principal that will become due on the refunding bonds within the next 6 months period, then the treasurer of the township shall use the money available from the proceeds of taxes levied for the payment of the refunding bonds in calling them for payment if, by their terms, they are subject to redemption. A township may, however, provide in the bond ordinance that whenever the township is not in default in payment of the principal of or interest upon the refunding bonds and has set aside the sums of money provided in this paragraph for interest accruing and principal maturing within the next 6 months period, the money available from the proceeds of taxes levied for the payment of refunding bonds shall be used first in the purchase of the refunding bonds at the lowest price obtainable (but not to exceed their par value and accrued interest) after sealed tenders for their purchase have been advertised for as directed by the corporate authorities of the township.

(c) Refunding bonds called for payment and paid or purchased under this Section shall be marked paid and cancelled.

(Source: Laws 1941, vol. 2, p. 489; P.A. 88-62.)