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| [ Introduced ] | [ Enrolled ] | [ House Amendment 001 ] |
| [ House Amendment 002 ] |
91_SB1627eng SB1627 Engrossed LRB9112143MWgc 1 AN ACT concerning local government debt. 2 Be it enacted by the People of the State of Illinois, 3 represented in the General Assembly: 4 Section 5. The Local Government Debt Reform Act is 5 amended by changing Sections 5, 13, and 17 and by adding 6 Section 16.5 as follows: 7 (30 ILCS 350/5) (from Ch. 17, par. 6905) 8 Sec. 5. Backdoor referendum procedure. (a) Whenever 9 applicable law provides that the authorization or the 10 issuance of bonds, or the becoming effective of an ordinance 11 providing for the authorization or issuance of bonds, may be 12 subject to a backdoor referendum, the provisions of this 13 Section may be used as an alternative to the specific 14 procedures as otherwise set forth by applicable law. 15 (b) The governing body may adopt an authorizing 16 ordinance describing briefly the authority under which bonds 17 are proposed to be issued, the nature of the project or 18 purpose to be financed, the estimated total costs of the 19 project or purpose, including in such costs all items related 20 to financing the project or purpose, and the maximum amount 21 of bonds authorized to be issued to pay such costs. No 22 further details or specifications are required in such 23 authorizing ordinance. Such authorizing ordinance, along 24 with any other notice as required by applicable law, 25 including any notice as to the right of electors to file a 26 petition and the number of voters required to sign any such 27 petition, shall be published at least once in a newspaper of 28 general circulation in the governmental unit. The governing 29 body may, but is not required to, post the notice 30 electronically on its World Wide Web pagesor posted as31required by applicable law. A petition may be filed after SB1627 Engrossed -2- LRB9112143MWgc 1 such publication or posting during the period as provided by 2 applicable law; but upon the expiration of any such period 3 without the filing of a petition meeting the requirements of 4 the applicable law, the governing body shall be authorized to 5 issue such bonds as if they had followed all necessary 6 procedures set forth in such applicable law. 7 (c) If no petition meeting the requirements of 8 applicable law is filed during the petition period, then the 9 governing body may adopt additional ordinances or proceedings 10 supplementing or amending the authorizing ordinance so long 11 as the maximum amount of bonds as set forth in the 12 authorizing ordinance is not exceeded and there is no 13 material change in the project or purpose described in the 14 authorizing ordinance. Such additional ordinances or 15 proceedings shall in all instances become effective 16 immediately without publication or posting or any further act 17 or requirement. The authorizing ordinance, together with 18 such additional ordinance or proceedings, shall constitute 19 complete authority for the issuance of such bonds under 20 applicable law. 21 (d) If applicable law provides that notice alone shall 22 be given to commence a backdoor referendum, the notice shall 23 be published at least once in a newspaper of general 24 circulation in the governmental unit. The governing body 25 may, but is not required to, post the notice electronically 26 on its World Wide Web pages. 27 (Source: P.A. 85-1419.) 28 (30 ILCS 350/13) (from Ch. 17, par. 6913) 29 Sec. 13. Certain pledges. A governmental unit may 30 pledge, as security for the payment of its bonds, (1) 31 revenues derived from the operation of any utility system or 32 revenue producing enterprise, (2) moneys deposited or to be 33 deposited into any special fund of the governmental unit, (3) SB1627 Engrossed -3- LRB9112143MWgc 1 grants or other revenues or taxes expected to be received by 2 the governmental unit from the State or federal government, 3 including taxes imposed by the governmental unit pursuant to 4 grant of authority by the State, such as sales or use taxes 5 or utility taxes, (4) special assessments to be collected 6 with respect to a local improvement financed with the 7 proceeds of bonds, or (5) payments to be made by another 8 governmental unit pursuant to a service, user or other 9 similar agreement with such governmental unit. 10 Any such pledge made by a governmental unit shall be 11 valid and binding from the time such pledge is made. The 12 revenues, moneys and other funds so pledged and thereafter 13 received by the governmental unit shall immediately be 14 subject to the lien of such pledge without any physical 15 delivery thereof or further act; and, subject only to the 16 provisions of prior agreements, the lien of such pledge shall 17 be valid and binding as against all parties having claims of 18 any kind in tort, contract or otherwise against the 19 governmental unit irrespective of whether such parties have 20 notice thereof. Pursuant to any such pledge, a governmental 21 unit may bind itself to impose rates, charges or taxes to the 22 fullest extent permitted by applicable law. No ordinance, 23 resolution, trust agreement or other instrument by which such 24 pledge is created need be filed or recorded except in the 25 records of the governmental unit. 26 The State Treasurer, the State Comptroller, the 27 Department of Revenue, the Department of Transportation, the 28 State Superintendent of Education, or any Regional 29 Superintendent of Schools shall deposit or cause to be 30 deposited any amount of grants or other revenues or taxes 31 expected to be received by a governmental unit from that 32 official or entity that have been pledged to the payment of 33 bonds of the governmental unit, in accordance with the 34 authorization of the governmental unit, directly into a SB1627 Engrossed -4- LRB9112143MWgc 1 designated escrow account established by the governmental 2 unit. The ordinance authorizing that disposition shall, 3 within 10 days after adoption by the governing body of the 4 governmental unit, be filed with the official or entity 5 having custody of the pledged grants or other revenues or 6 taxes. 7 (Source: P.A. 85-1419.) 8 (30 ILCS 350/16.5 new) 9 Sec. 16.5. Proposition for bonds. For all elections 10 held after July 1, 2000, the form of a proposition to 11 authorize the issuance of bonds pursuant to either a 12 referendum or backdoor referendum may be as set forth in this 13 Section as an alternative to the form of proposition as 14 otherwise set forth by applicable law. The proposition 15 authorized by this Section shall be in substantially the 16 following form: 17 Shall (name of governmental unit) (state purpose for 18 the bond issue) and issue its bonds to the amount of $ 19 (state amount) for the purpose of paying the costs 20 thereof? 21 If a school district has received a grant entitlement 22 from the Illinois State Board of Education pursuant to the 23 School Construction Law for a school construction project to 24 be financed in part with proceeds of a bond authorized by 25 referendum, then the form of proposition may at the option of 26 the school district additionally contain substantially the 27 following language: 28 (Name of school district) has received a grant 29 entitlement in the amount of $ (state amount) from the 30 Illinois State Board of Education pursuant to the School 31 Construction Law for the school construction project to 32 be financed in part with proceeds of the bonds. SB1627 Engrossed -5- LRB9112143MWgc 1 (30 ILCS 350/17) (from Ch. 17, par. 6917) 2 Sec. 17. Leases and installment contracts. 3 (a) Interest not debt; debt on leases and installment 4 contracts. Interest on bonds shall not be included in any 5 computation of indebtedness of a governmental unit for the 6 purpose of any statutory provision or limitation. For bonds 7 consisting of leases and installment or financing contracts, 8 (1) that portion of payments made by a governmental unit 9 under the terms of a bond designated as interest in the bond 10 or the ordinance authorizing such bond shall be treated as 11 interest for purposes of this Section (2) where portions of 12 payments due under the terms of a bond have not been 13 designated as interest in the bond or the ordinance 14 authorizing such bond, and all or a portion of such payments 15 is to be used for the payment of principal of and interest on 16 other bonds of the governmental unit or bonds issued by 17 another unit of local government, such as a public building 18 commission, the payments equal to interest due on such 19 corresponding bonds shall be treated as interest for purposes 20 of this Section and (3) where portions of payments due under 21 the terms of a bond have not been designated as interest in 22 the bond or ordinance authorizing such bond and no portion of 23 any such payment is to be used for the payment of principal 24 of and interest on other bonds of the governmental unit or 25 another unit of local government, a portion of each payment 26 due under the terms of such bond shall be treated as interest 27 for purposes of this Section; such portion shall be equal in 28 amount to the interest that would have been paid on a 29 notional obligation of the governmental unit (bearing 30 interest at the highest rate permitted by law for bonds of 31 the governmental unit at the time the bond was issued or, if 32 no such limit existed, 12%) on which the payments of 33 principal and interest were due at the same times and in the 34 same amounts as payments are due under the terms of the SB1627 Engrossed -6- LRB9112143MWgc 1 bonds. The rule set forth in this Section shall be 2 applicable to all interest no matter when earned or accrued 3 or at what interval paid, and whether or not a bond bears 4 interest which compounds at certain intervals. For purposes 5 of bonds sold at amounts less than 95% of their stated value 6 at maturity, interest for purposes of this Section includes 7 the difference between the amount set forth on the face of 8 the bond as the original principal amount and the bond's 9 stated value at maturity. 10 This subsection may be made applicable to bonds issued 11 prior to the effective date of this Act by passage of an 12 ordinance to such effect by the governing body of a 13 governmental unit. 14 (b) Purchase or lease of property. The governing body 15 of each governmental unit may purchase or lease either real 16 or personal property, including investments, investment 17 agreements, or investment services, through agreements that 18 provide that the consideration for the purchase or lease may 19 be paid through installments made at stated intervals for a 20 period of no more than 20 years or another period of time 21 authorized by law, whichever is greater. Each governmental 22 unit may issue certificates evidencing the indebtedness 23 incurred under the lease or agreement. The governing body 24 may provide for the treasurer, comptroller, finance officer, 25 or other officer of the governing body charged with financial 26 administration to act as counter-party to any such lease or 27 agreement, as nominee lessor or seller. When the lease or 28 agreement is executed by the officer of the governmental unit 29 authorized by the governing body to bind the governmental 30 unit thereon by the execution thereof and is filed with and 31 executed by the nominee lessor or seller, the lease or 32 agreement shall be sufficiently executed so as to permit the 33 governmental unit to issue certificates evidencing the 34 indebtedness incurred under the lease or agreement. The SB1627 Engrossed -7- LRB9112143MWgc 1 certificatesagreements. The certificateshall be valid 2 whether or not an appropriation with respect thereto is 3 included in any annual or supplemental budget adopted by the 4 governmental unit. From time to time, as the governing body 5 executes contracts for the purpose of acquiring and 6 constructing the services or real or personal property that 7 is a part of the subject of the lease or agreement, including 8 financial, legal, architectural, and engineering services 9 related to the lease or agreement, the governing body shall 10 order the contracts filed with its nominee officer, and that 11 officer shall identify the contracts to the lease or 12 agreement; that identification shall permit the payment of 13 the contract from the proceeds of the certificates; and the 14 nominee officer shall duly apply or cause to be applied 15 proceeds of the certificates to the payment of the contracts. 16 The governing body of each governmental unit may sell, lease, 17 convey, and reacquire either real or personal property, or 18 any interest in real or personal property, upon any terms and 19 conditions and in any manner, as the governing body shall 20 determine, if the governmental unit will lease, acquire by 21 purchase agreement, or otherwise reacquire the property, as 22 authorized by this subsection or any other applicable law. 23 All indebtedness incurred under this subsection, when 24 aggregated with the existing indebtedness of the governmental 25 unit, may not exceed the debt limits provided by applicable 26 law. 27 (Source: P.A. 91-493, eff. 8-13-99.) 28 Section 99. Effective date. This Act takes effect upon 29 becoming law.