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Public Act 093-0666
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| HB2626 Enrolled |
LRB093 08783 RCE 09014 b |
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AN ACT concerning bonds.
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Be it enacted by the People of the State of Illinois, |
represented in the General Assembly:
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Section 5. The General Obligation Bond Act is amended by |
changing Section 9 as follows:
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(30 ILCS 330/9) (from Ch. 127, par. 659)
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Sec. 9. Conditions for Issuance and Sale of Bonds - |
Requirements for
Bonds.
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(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
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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
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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
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Governor's Office of Management and Budget
Bureau of the Budget
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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.
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In the case of any series of Bonds bearing interest at a |
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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
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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
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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
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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
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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.
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(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
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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 |
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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
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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
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arrangements.
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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
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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.
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(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
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Bonds
shall be subject to the terms of such policy. The terms |