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Public Act 91-0492
HB0943 Enrolled LRB9101953PTpk
AN ACT to amend the Home Equity Assurance Act by changing
Section 11.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Home Equity Assurance Act is amended by
changing Section 11 as follows:
(65 ILCS 95/11) (from Ch. 24, par. 1611)
Sec. 11. Guarantee Fund.
(a) Each governing commission and program created by
referendum under the provisions of this Act shall maintain a
guarantee fund for the purposes of paying the costs of
administering the program and extending protection to members
pursuant to the limitations and procedures set forth in this
Act.
(b) The guarantee fund shall be raised by means of an
annual tax levied on all residential property within the
territory of the program having at least one, but not more
than 6 dwelling units and classified by county ordinance as
residential. The rate of this tax may be changed from year
to year by majority vote of the governing commission but in
no case shall it exceed a rate of .12% of the equalized
assessed valuation of all property in the territory of the
program having at least one, but not more than 6 dwelling
units and classified by county ordinance as residential, or
the maximum tax rate approved by the voters of the territory
at the referendum which created the program or, in the case
of a merged program, the maximum tax rate approved by the
voters at the referendum authorizing the merger, whichever
rate is lower. The commissioners shall cause the amount to
be raised by taxation in each year to be certified to the
county clerk in the manner provided by law, and any tax so
levied and certified shall be collected and enforced in the
same manner and by the same officers as those taxes for the
purposes of the county and city within which the territory of
the commission is located. Any such tax, when collected,
shall be paid over to the proper officer of the commission
who is authorized to receive and receipt for such tax. The
governing commission may issue tax anticipation warrants
against the taxes to be assessed for the calendar year in
which the program is created and for the first full calendar
year after the creation of the program.
(c) The moneys deposited in the guarantee fund shall, as
nearly as practicable, be fully and continuously invested or
reinvested by the governing commission in investment
obligations which shall be in such amounts, and shall mature
at such times, that the maturity or date of redemption at the
option of the holder of such investment obligations shall
coincide, as nearly as practicable, with the times at which
monies will be required for the purposes of the program. For
the purposes of this Section investment obligation shall mean
direct general municipal, state, or federal obligations which
at the time are legal investments under the laws of this
State and the payment of principal of and interest on which
are unconditionally guaranteed by the governing body issuing
them.
(d) Except as permitted by this subsection, the
guarantee fund shall be used solely and exclusively for the
purpose of providing guarantees to members of the particular
Guaranteed Home Equity Program and for reasonable salaries,
expenses, bills, and fees incurred in administering the
program, and shall be used for no other purpose.
A governing commission, with no less than $4,000,000 in
its guarantee fund, may, if authorized by referendum duly
adopted by a majority of the voters, establish a Low Interest
Home Improvement Loan Program in accordance with and subject
to procedures established by a financial institution, as
defined in the Illinois Banking Act. Whenever the question
of creating a Low Interest Home Improvement Loan Program is
initiated by resolution or ordinance of the corporate
authorities of the municipality or by a petition signed by
not less than 10% of the total number of registered voters of
each precinct in the territory, the registered voters of
which are eligible to sign the petition, it shall be the duty
of the election authority having jurisdiction over the
municipality to submit the question of creating the program
to the electors of each precinct within the territory at the
regular election specified in the resolution, ordinance, or
petition initiating the question. A petition initiating a
question described in this subsection shall be filed with the
election authority having jurisdiction over the municipality.
The petition shall be filed and objections to the petition
shall be made in the manner provided in the Election Code. A
resolution, ordinance, or petition initiating a question
described in this subsection shall specify the election at
which the question is to be submitted. The referendum on the
question shall be held in accordance with the Election Code.
The question shall be in substantially the following form:
"Shall the (name of the home equity program)
implement a Low Interest Home Improvement Loan Program
with money from the guarantee fund of the established
guaranteed home equity program?"
The votes must be recorded as "Yes" or "No".
Whenever a majority of the voters on the public question
approve the creation of the program as certified by the
proper election authorities, the commission shall establish
the program and administer the program with funds collected
under the Guaranteed Home Equity Program, subject to the
following conditions:
(1) At any given time, the cumulative total of all
loans and loan guarantees (if applicable) issued under
this program may not reduce the balance of the guarantee
fund to less than $3,000,000.
(2) Only eligible applicants may apply for a loan.
(3) The loan must be used for the repair,
maintenance, remodeling, alteration, or improvement of a
guaranteed residence. This condition is not intended to
exclude the repair, maintenance, remodeling, alteration,
or improvement of a guaranteed residence's landscape.
This condition is intended to exclude the demolition of a
current residence. This condition is also intended to
exclude the construction of a new residence.
(4) An eligible applicant may not borrow more than
the amount of equity value in his or her residence.
(5) A commission must ensure that loans issued are
secured with collateral that is at least equal to the
amount of the loan or loan guarantee.
(6) A commission shall charge an interest rate
which it determines to be below the market rate of
interest generally available to the applicant.
(7) A commission may, by resolution, establish
other administrative rules and procedures as are
necessary to implement this program including, but not
limited to, loan dollar amounts and terms. A commission
may also impose on loan applicants a one-time application
fee for the purpose of defraying the costs of
administering the program.
(e) The guarantee fund shall be maintained, invested,
and expended exclusively by the governing commission of the
program for whose purposes it was created. Under no
circumstance shall the guarantee fund be used by any person
or persons, governmental body, or public or private agency or
concern other than the governing commission of the program
for whose purposes it was created. Under no circumstances
shall the guarantee fund be commingled with other funds or
investments.
(e-1) No commissioner or family member of a
commissioner, or employee or family member of an employee,
may receive any financial benefit, either directly or
indirectly, from the guarantee fund. Nothing in this
subsection (e-1) shall be construed to prohibit payment of
expenses to a commissioner in accordance with Section 4 or
payment of salaries or expenses to an employee in accordance
with this Section.
As used in this subsection (e-1), "family member" means a
spouse, child, stepchild, parent, brother, or sister of a
commissioner or a child, stepchild, parent, brother, or
sister of a commissioner's spouse.
(f) An independent audit of the guarantee fund and the
management of the program shall be conducted annually and
made available to the public through any office of the
governing commission or a public facility such as a local
public library located within the territory of the program.
(Source: P.A. 88-439.)
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