97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB1866

 

Introduced , by Rep. Frank J. Mautino

 

SYNOPSIS AS INTRODUCED:
 
70 ILCS 530/7  from Ch. 85, par. 7157
70 ILCS 530/7.1 new

    Amends the Upper Illinois River Valley Development Authority Act. Provides that the Upper Illinois River Valley Development Authority may issue bonds, notes, or other evidences of indebtedness in an aggregate amount outstanding not to exceed $500,000,000 (now, $250,000,000). Provides that the notes and bonds issued by the Authority and the income from these notes and bonds may be free from all taxation by the State or its political subdivisions, except for estate, transfer, and inheritance taxes. Provides that the exemption from taxation shall apply to the income on any notes or bonds of the Authority only if the Authority in its sole judgment determines that the exemption enhances the marketability of the bonds or notes or reduces the interest rates that would otherwise be borne by the bonds or notes. Effective immediately.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

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1    AN ACT concerning local government.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Upper Illinois River Valley Development
5Authority Act is amended by changing Section 7 and by adding
6Section 7.1 as follows:
 
7    (70 ILCS 530/7)  (from Ch. 85, par. 7157)
8    Sec. 7. Bonds.
9    (a) The Authority, with the written approval of the
10Governor, shall have the continuing power to issue bonds,
11notes, or other evidences of indebtedness in an aggregate
12amount outstanding not to exceed $500,000,000 $250,000,000 for
13the purpose of developing, constructing, acquiring or
14improving projects, including those established by business
15entities locating or expanding property within the territorial
16jurisdiction of the Authority, for entering into venture
17capital agreements with businesses locating or expanding
18within the territorial jurisdiction of the Authority, for
19acquiring and improving any property necessary and useful in
20connection therewith and for the purposes of the Employee
21Ownership Assistance Act. For the purpose of evidencing the
22obligations of the Authority to repay any money borrowed, the
23Authority may, pursuant to resolution, from time to time issue

 

 

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1and dispose of its interest bearing revenue bonds, notes or
2other evidences of indebtedness and may also from time to time
3issue and dispose of such bonds, notes or other evidences of
4indebtedness to refund, at maturity, at a redemption date or in
5advance of either, any bonds, notes or other evidences of
6indebtedness pursuant to redemption provisions or at any time
7before maturity. All such bonds, notes or other evidences of
8indebtedness shall be payable solely and only from the revenues
9or income to be derived from loans made with respect to
10projects, from the leasing or sale of the projects or from any
11other funds available to the Authority for such purposes. The
12bonds, notes or other evidences of indebtedness may bear such
13date or dates, may mature at such time or times not exceeding
1440 years from their respective dates, may bear interest at such
15rate or rates not exceeding the maximum rate permitted by "An
16Act to authorize public corporations to issue bonds, other
17evidences of indebtedness and tax anticipation warrants
18subject to interest rate limitations set forth therein",
19approved May 26, 1970, as amended, may be in such form, may
20carry such registration privileges, may be executed in such
21manner, may be payable at such place or places, may be made
22subject to redemption in such manner and upon such terms, with
23or without premium as is stated on the face thereof, may be
24authenticated in such manner and may contain such terms and
25covenants as may be provided by an applicable resolution.
26    (b-1) The holder or holders of any bonds, notes or other

 

 

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1evidences of indebtedness issued by the Authority may bring
2suits at law or proceedings in equity to compel the performance
3and observance by any corporation or person or by the Authority
4or any of its agents or employees of any contract or covenant
5made with the holders of such bonds, notes or other evidences
6of indebtedness, to compel such corporation, person, the
7Authority and any of its agents or employees to perform any
8duties required to be performed for the benefit of the holders
9of any such bonds, notes or other evidences of indebtedness by
10the provision of the resolution authorizing their issuance and
11to enjoin such corporation, person, the Authority and any of
12its agents or employees from taking any action in conflict with
13any such contract or covenant.
14    (b-2) If the Authority fails to pay the principal of or
15interest on any of the bonds or premium, if any, as the same
16become due, a civil action to compel payment may be instituted
17in the appropriate circuit court by the holder or holders of
18the bonds on which such default of payment exists or by an
19indenture trustee acting on behalf of such holders. Delivery of
20a summons and a copy of the complaint to the Chairman of the
21Board shall constitute sufficient service to give the circuit
22court jurisdiction of the subject matter of such a suit and
23jurisdiction over the Authority and its officers named as
24defendants for the purpose of compelling such payment. Any
25case, controversy or cause of action concerning the validity of
26this Act relates to the revenue of the State of Illinois.

 

 

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1    (c) Notwithstanding the form and tenor of any such bonds,
2notes or other evidences of indebtedness and in the absence of
3any express recital on the face thereof that it is
4non-negotiable, all such bonds, notes and other evidences of
5indebtedness shall be negotiable instruments. Pending the
6preparation and execution of any such bonds, notes or other
7evidences of indebtedness, temporary bonds, notes or evidences
8of indebtedness may be issued as provided by ordinance.
9    (d) To secure the payment of any or all of such bonds,
10notes or other evidences of indebtedness, the revenues to be
11received by the Authority from a lease agreement or loan
12agreement shall be pledged, and, for the purpose of setting
13forth the covenants and undertakings of the Authority in
14connection with the issuance thereof and the issuance of any
15additional bonds, notes or other evidences of indebtedness
16payable from such revenues, income or other funds to be derived
17from projects, the Authority may execute and deliver a mortgage
18or trust agreement. A remedy for any breach or default of the
19terms of any such mortgage or trust agreement by the Authority
20may be by mandamus proceedings in the appropriate circuit court
21to compel the performance and compliance therewith, but the
22trust agreement may prescribe by whom or on whose behalf such
23action may be instituted.
24    (e) Such bonds or notes shall be secured as provided in the
25authorizing ordinance which may, notwithstanding any other
26provision of this Act, include in addition to any other

 

 

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1security a specific pledge or assignment of and lien on or
2security interest in any or all revenues or money of the
3Authority from whatever source which may by law be used for
4debt service purposes and a specific pledge or assignment of
5and lien on or security interest in any funds or accounts
6established or provided for by ordinance of the Authority
7authorizing the issuance of such bonds or notes.
8    (f) In the event that the Authority determines that monies
9of the Authority will not be sufficient for the payment of the
10principal of and interest on its bonds during the next State
11fiscal year, the Chairman, as soon as practicable, shall
12certify to the Governor the amount required by the Authority to
13enable it to pay such principal of and interest on the bonds.
14The Governor shall submit the amount so certified to the
15General Assembly as soon as practicable, but no later than the
16end of the current State fiscal year. This Section shall not
17apply to any bonds or notes as to which the Authority shall
18have determined, in the resolution authorizing the issuance of
19the bonds or notes, that this Section shall not apply. Whenever
20the Authority makes such a determination, that fact shall be
21plainly stated on the face of the bonds or notes and that fact
22shall also be reported to the Governor.
23    In the event of a withdrawal of moneys from a reserve fund
24established with respect to any issue or issues of bonds of the
25Authority to pay principal or interest on those bonds, the
26Chairman of the Authority, as soon as practicable, shall

 

 

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1certify to the Governor the amount required to restore the
2reserve fund to the level required in the resolution or
3indenture securing those bonds. The Governor shall submit the
4amount so certified to the General Assembly as soon as
5practicable, but no later than the end of the current State
6fiscal year.
7    (g) The State of Illinois pledges to and agrees with the
8holders of the bonds and notes of the Authority issued pursuant
9to this Section that the State will not limit or alter the
10rights and powers vested in the Authority by this Act so as to
11impair the terms of any contract made by the Authority with
12such holders or in any way impair the rights and remedies of
13such holders until such bonds and notes, together with interest
14thereon, with interest on any unpaid installments of interest,
15and all costs and expenses in connection with any action or
16proceedings by or on behalf of such holders, are fully met and
17discharged. In addition, the State pledges to and agrees with
18the holders of the bonds and notes of the Authority issued
19pursuant to this Section that the State will not limit or alter
20the basis on which State funds are to be paid to the Authority
21as provided in this Act, or the use of such funds, so as to
22impair the terms of any such contract. The Authority is
23authorized to include these pledges and agreements of the State
24in any contract with the holders of bonds or notes issued
25pursuant to this Section.
26    (h) Not less than 30 days prior to the commitment to issue

 

 

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1bonds, notes, or other evidences of indebtedness for the
2purpose of developing, constructing, acquiring or improving
3housing or residential projects, as defined in Section 3, the
4Authority shall provide notice to the Executive Director of the
5Illinois Housing Development Authority. Within 30 days after
6notice is provided, the Illinois Housing Development Authority
7shall either in writing express interest in financing the
8project or notify the Authority that it is not interested in
9providing such financing and the Authority may finance the
10project or seek alternative financing.
11(Source: P.A. 91-905, eff. 7-7-00.)
 
12    (70 ILCS 530/7.1 new)
13    Sec. 7.1. Bonds and notes; exemption from taxation. The
14creation of the Authority is in all respects for the benefit of
15the people of Illinois and for the improvement of their health,
16safety, welfare, comfort, and security, and its purposes are
17public purposes. In consideration thereof, the notes and bonds
18of the Authority issued pursuant to this Act and the income
19from these notes and bonds may be free from all taxation by the
20State or its political subdivisions, except for estate,
21transfer, and inheritance taxes. The exemption from taxation
22set forth in this Section shall apply to the income on any
23notes or bonds of the Authority only if the Authority in its
24sole judgment determines that the exemption enhances the
25marketability of the bonds or notes or reduces the interest

 

 

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1rates that would otherwise be borne by the bonds or notes. For
2purposes of Section 250 of the Illinois Income Tax Act, the
3exemption of the Authority shall terminate after all of the
4bonds have been paid. The amount of the income that shall be
5added and then subtracted on the Illinois income tax return of
6a taxpayer, subject to Section 203 of the Illinois Income Tax
7Act, from federal adjusted gross income or federal taxable
8income in computing Illinois base income shall be the interest
9net of any bond premium amortization.
 
10    Section 99. Effective date. This Act takes effect upon
11becoming law.