Public Act 093-0666
 		





HB2626 Enrolled
LRB093 08783 RCE 09014 b






    AN ACT concerning bonds. 

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


 
    Section 5. The General Obligation Bond Act is amended  by 
changing Section 9 as follows:
 



    (30 ILCS 330/9)  (from Ch. 127, par. 659)



    Sec. 9. Conditions for Issuance and Sale of Bonds - 
Requirements for
Bonds.

    (a) Bonds shall be issued and sold from time to time, in 
one or
more series, in such amounts and at such prices as may 
be directed by the
Governor, upon recommendation by the 
Director of the
Governor's Office of Management and Budget

Bureau of the Budget.
Bonds shall be in such form (either 
coupon, registered or book entry), in
such denominations, 
payable within 30 years from their date, subject to such
terms 
of redemption with or without premium, bear interest payable at

such times and at such fixed or variable rate or rates, and be 
dated
as shall be fixed and determined by the Director of
the

Governor's Office of Management and Budget
Bureau of the Budget

in the order authorizing the issuance and sale
of any series of 
Bonds, which order shall be approved by the Governor
and is 
herein called a "Bond Sale Order"; provided however, that 
interest
payable at fixed or variable rates shall not exceed 
that permitted in the
Bond Authorization Act, as now or 
hereafter amended.  Bonds shall be
payable at such place or 
places, within or without the State of Illinois, and
may be 
made registrable as to either principal or as to both principal 
and
interest, as shall be specified in the Bond Sale Order.  
Bonds may be callable
or subject to purchase and retirement or 
tender and remarketing as fixed
and determined in the Bond Sale 
Order.

    In the case of any series of Bonds bearing interest at a 
variable interest
rate ("Variable Rate Bonds"), in lieu of 
determining the rate or rates at which
such series of Variable 
Rate Bonds shall bear interest and the price or prices
at which 
such Variable Rate Bonds shall be initially sold or remarketed 
(in the
event of purchase and subsequent resale), the Bond Sale 
Order may provide that
such interest rates and prices may vary 
from time to time depending on criteria
established in such 
Bond Sale Order, which criteria may include, without

limitation, references to indices or variations in interest 
rates as may, in
the judgment of a remarketing agent, be 
necessary to cause Variable Rate Bonds
of such series to be 
remarketable from time to time at a price equal to their

principal amount, and may provide for appointment of a bank, 
trust company,
investment bank, or other financial institution 
to serve as remarketing agent
in that connection.
The Bond Sale 
Order may provide that alternative interest rates or provisions

for establishing alternative interest rates, different 
security or claim
priorities, or different call or amortization 
provisions will apply during
such times as Variable Rate Bonds 
of any series are held by a person providing
credit or 
liquidity enhancement arrangements for such Bonds as 
authorized in
subsection (b) of this Section.
The Bond Sale 
Order may also provide for such variable interest rates to be

established pursuant to a process generally known as an auction 
rate process
and may provide for appointment of one or more 
financial institutions to serve
as auction agents and 
broker-dealers in connection with the establishment of
such 
interest rates and the sale and remarketing of such Bonds.

    (b) In connection with the issuance of any series of Bonds, 
the State may
enter into arrangements to provide additional 
security and liquidity for such
Bonds, including, without 
limitation, bond or interest rate insurance or
letters of 
credit, lines of credit, bond purchase contracts, or other

arrangements whereby funds are made available to retire or 
purchase Bonds,
thereby assuring the ability of owners of the 
Bonds to sell or redeem their
Bonds.  The State may enter into 
contracts and may agree to pay fees to persons
providing such 
arrangements, but only under circumstances where the Director 
of
the
Governor's Office of Management and Budget
Bureau of the 
Budget certifies that he or she reasonably expects the total

interest paid or to be paid on the Bonds, together with the 
fees for the
arrangements (being treated as if interest), would 
not, taken together, cause
the Bonds to bear interest, 
calculated to their stated maturity, at a rate in
excess of the 
rate that the Bonds would bear in the absence of such

arrangements.

    The State may, with respect to Bonds issued or anticipated 
to be issued,
participate in and enter into arrangements with 
respect to interest rate
protection or exchange agreements, 
guarantees, or financial futures contracts
for the purpose of  
limiting, reducing, or managing
or restricting interest rate 
exposure
risk.
The authority granted under this paragraph, 
however, shall not increase the principal amount of Bonds 
authorized to be issued by law. The arrangements may be 
executed and delivered by the Director
of the
Governor's Office 
of Management and Budget
Bureau of the Budget on behalf of the 
State.  Net payments for such
arrangements shall constitute 
interest on the Bonds and shall be paid from the
General 
Obligation Bond Retirement and Interest Fund.  The Director of 
the
Governor's Office of Management and Budget
Bureau of the 
Budget shall at least annually certify to the Governor and
the

State Comptroller his or her estimate of the amounts of such 
net payments to
be included in the calculation of interest 
required to be paid by the State.

    (c) Prior to the issuance of any Variable Rate Bonds 
pursuant to
subsection (a), the Director of the
Governor's 
Office of Management and Budget
Bureau of the Budget shall 
adopt an
interest rate risk management policy providing that 
the amount of the State's
variable rate exposure with respect 
to Bonds shall not exceed 20%.  This policy
shall remain in 
effect while any Bonds are outstanding and the issuance of

Bonds
shall be subject to the terms of such policy. The terms 
of this policy may be
amended from time to time by the Director 
of the
Governor's Office of Management and Budget
Bureau of the 
Budget but in no
event shall any amendment cause the permitted 
level of the State's variable
rate exposure with respect to 
Bonds to exceed 20%.

(Source: P.A. 92-16, eff. 6-28-01; 93-9, eff. 6-3-03; revised 
8-23-03.)


 
    Section 99. Effective date. This Act takes effect upon 
becoming law.