HB0983 EnrolledLRB098 07872 HLH 37956 b

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 Local Government Debt Reform Act is amended
5by changing Section 15 as follows:
 
6    (30 ILCS 350/15)  (from Ch. 17, par. 6915)
7    Sec. 15. Double-barrelled bonds. Whenever revenue bonds
8have been authorized to be issued pursuant to applicable law or
9whenever there exists for a governmental unit a revenue source,
10the procedures set forth in this Section may be used by a
11governing body. General obligation bonds may be issued in lieu
12of such revenue bonds as authorized, and general obligation
13bonds may be issued payable from any revenue source. Such
14general obligation bonds may be referred to as "alternate
15bonds". Alternate bonds may be issued without any referendum or
16backdoor referendum except as provided in this Section, upon
17the terms provided in Section 10 of this Act without reference
18to other provisions of law, but only upon the conditions
19provided in this Section. Alternate bonds shall not be regarded
20as or included in any computation of indebtedness for the
21purpose of any statutory provision or limitation except as
22expressly provided in this Section.
23    Such conditions are:

 

 

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1    (a) Alternate bonds shall be issued for a lawful corporate
2purpose. If issued in lieu of revenue bonds, alternate bonds
3shall be issued for the purposes for which such revenue bonds
4shall have been authorized. If issued payable from a revenue
5source in the manner hereinafter provided, which revenue source
6is limited in its purposes or applications, then the alternate
7bonds shall be issued only for such limited purposes or
8applications. Alternate bonds may be issued payable from either
9enterprise revenues or revenue sources, or both.
10    (b) Alternate bonds shall be subject to backdoor
11referendum. The provisions of Section 5 of this Act shall apply
12to such backdoor referendum, together with the provisions
13hereof. The authorizing ordinance shall be published in a
14newspaper of general circulation in the governmental unit.
15Along with or as part of the authorizing ordinance, there shall
16be published a notice of (1) the specific number of voters
17required to sign a petition requesting that the issuance of the
18alternate bonds be submitted to referendum, (2) the time when
19such petition must be filed, (3) the date of the prospective
20referendum, and (4), with respect to authorizing ordinances
21adopted on or after January 1, 1991, a statement that
22identifies any revenue source that will be used to pay debt
23service on the alternate bonds. The clerk or secretary of the
24governmental unit shall make a petition form available to
25anyone requesting one.
26    Except as provided in the following paragraph, if If no

 

 

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1petition is filed with the clerk or secretary within 30 days of
2publication of the authorizing ordinance and notice, the
3alternate bonds shall be authorized to be issued. But if within
4this 30 days period, a petition is filed with such clerk or
5secretary signed by electors numbering the greater of (i) 7.5%
6of the registered voters in the governmental unit or (ii) 200
7of those registered voters or 15% of those registered voters,
8whichever is less, asking that the issuance of such alternate
9bonds be submitted to referendum, the clerk or secretary shall
10certify such question for submission at an election held in
11accordance with the general election law.
12    Notwithstanding the previous paragraph, in governmental
13units with fewer than 500,000 inhabitants that propose to issue
14alternate bonds payable solely from enterprise revenues as
15defined under Section 3 of this Act, except for such alternate
16bonds that finance or refinance projects concerning public
17utilities, public streets and roads or public safety
18facilities, and related infrastructure and equipment, if no
19petition is filed with the clerk or secretary within 45 days of
20publication of the authorizing ordinance and notice, the
21alternate bonds shall be authorized to be issued. But if,
22within this 45-day period, a petition is filed with such clerk
23or secretary signed by the necessary number of electors, asking
24that the issuance of such alternate bonds be submitted to
25referendum, the clerk or secretary shall certify such question
26for submission at an election held in accordance with the

 

 

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1general election law. For purposes of this paragraph, the
2necessary number of electors for a governmental unit with more
3than 4,000 registered voters is the lesser of (i) 5% of the
4registered voters or (ii) 5,000 registered voters; and the
5necessary number of electors for a governmental unit with 4,000
6or fewer registered voters is the lesser of (i) 15% of the
7registered voters or (ii) 200 registered voters.
8    The question on the ballot shall include a statement of any
9revenue source that will be used to pay debt service on the
10alternate bonds. The alternate bonds shall be authorized to be
11issued if a majority of the votes cast on the question at such
12election are in favor thereof provided that notice of the bond
13referendum, if held before July 1, 1999, has been given in
14accordance with the provisions of Section 12-5 of the Election
15Code in effect at the time of the bond referendum, at least 10
16and not more than 45 days before the date of the election,
17notwithstanding the time for publication otherwise imposed by
18Section 12-5. Notices required in connection with the
19submission of public questions on or after July 1, 1999 shall
20be as set forth in Section 12-5 of the Election Code. Backdoor
21referendum proceedings for bonds and alternate bonds to be
22issued in lieu of such bonds may be conducted at the same time.
23    (c) To the extent payable from enterprise revenues, such
24revenues shall have been determined by the governing body to be
25sufficient to provide for or pay in each year to final maturity
26of such alternate bonds all of the following: (1) costs of

 

 

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1operation and maintenance of the utility or enterprise, but not
2including depreciation, (2) debt service on all outstanding
3revenue bonds payable from such enterprise revenues, (3) all
4amounts required to meet any fund or account requirements with
5respect to such outstanding revenue bonds, (4) other
6contractual or tort liability obligations, if any, payable from
7such enterprise revenues, and (5) in each year, an amount not
8less than 1.25 times debt service of all (i) alternate bonds
9payable from such enterprise revenues previously issued and
10outstanding and (ii) alternate bonds proposed to be issued. To
11the extent payable from one or more revenue sources, such
12sources shall have been determined by the governing body to
13provide in each year, an amount not less than 1.25 times debt
14service of all alternate bonds payable from such revenue
15sources previously issued and outstanding and alternate bonds
16proposed to be issued. The 1.25 figure in the preceding
17sentence shall be reduced to 1.10 if the revenue source is a
18governmental revenue source. The conditions enumerated in this
19subsection (c) need not be met for that amount of debt service
20provided for by the setting aside of proceeds of bonds or other
21moneys at the time of the delivery of such bonds.
22    (c-1) In the case of alternate bonds issued as variable
23rate bonds (including refunding bonds), debt service shall be
24projected based on the rate for the most recent date shown in
25the 20 G.O. Bond Index of average municipal bond yields as
26published in the most recent edition of The Bond Buyer

 

 

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1published in New York, New York (or any successor publication
2or index, or if such publication or index is no longer
3published, then any index of long-term municipal tax-exempt
4bond yields selected by the governmental unit), as of the date
5of determination referred to in subsection (c) of this Section.
6Any interest or fees that may be payable to the provider of a
7letter of credit, line of credit, surety bond, bond insurance,
8or other credit enhancement relating to such alternate bonds
9and any fees that may be payable to any remarketing agent need
10not be taken into account for purposes of such projection. If
11the governmental unit enters into an agreement in connection
12with such alternate bonds at the time of issuance thereof
13pursuant to which the governmental unit agrees for a specified
14period of time to pay an amount calculated at an agreed-upon
15rate or index based on a notional amount and the other party
16agrees to pay the governmental unit an amount calculated at an
17agreed-upon rate or index based on such notional amount,
18interest shall be projected for such specified period of time
19on the basis of the agreed-upon rate payable by the
20governmental unit.
21    (d) The determination of the sufficiency of enterprise
22revenues or a revenue source, as applicable, shall be supported
23by reference to the most recent audit of the governmental unit,
24which shall be for a fiscal year ending not earlier than 18
25months previous to the time of issuance of the alternate bonds.
26If such audit does not adequately show such enterprise revenues

 

 

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1or revenue source, as applicable, or if such enterprise
2revenues or revenue source, as applicable, are shown to be
3insufficient, then the determination of sufficiency shall be
4supported by the report of an independent accountant or
5feasibility analyst, the latter having a national reputation
6for expertise in such matters, who is not otherwise involved in
7the project being financed or refinanced with the proceeds of
8the alternate bonds, demonstrating the sufficiency of such
9revenues and explaining, if appropriate, by what means the
10revenues will be greater than as shown in the audit. Whenever
11such sufficiency is demonstrated by reference to a schedule of
12higher rates or charges for enterprise revenues or a higher tax
13imposition for a revenue source, such higher rates, charges or
14taxes shall have been properly imposed by an ordinance adopted
15prior to the time of delivery of alternate bonds. The reference
16to and acceptance of an audit or report, as the case may be,
17and the determination of the governing body as to sufficiency
18of enterprise revenues or a revenue source shall be conclusive
19evidence that the conditions of this Section have been met and
20that the alternate bonds are valid.
21    (e) The enterprise revenues or revenue source, as
22applicable, shall be in fact pledged to the payment of the
23alternate bonds; and the governing body shall covenant, to the
24extent it is empowered to do so, to provide for, collect and
25apply such enterprise revenues or revenue source, as
26applicable, to the payment of the alternate bonds and the

 

 

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1provision of not less than an additional .25 (or .10 for
2governmental revenue sources) times debt service. The pledge
3and establishment of rates or charges for enterprise revenues,
4or the imposition of taxes in a given rate or amount, as
5provided in this Section for alternate bonds, shall constitute
6a continuing obligation of the governmental unit with respect
7to such establishment or imposition and a continuing
8appropriation of the amounts received. All covenants relating
9to alternate bonds and the conditions and obligations imposed
10by this Section are enforceable by any bondholder of alternate
11bonds affected, any taxpayer of the governmental unit, and the
12People of the State of Illinois acting through the Attorney
13General or any designee, and in the event that any such action
14results in an order finding that the governmental unit has not
15properly set rates or charges or imposed taxes to the extent it
16is empowered to do so or collected and applied enterprise
17revenues or any revenue source, as applicable, as required by
18this Act, the plaintiff in any such action shall be awarded
19reasonable attorney's fees. The intent is that such enterprise
20revenues or revenue source, as applicable, shall be sufficient
21and shall be applied to the payment of debt service on such
22alternate bonds so that taxes need not be levied, or if levied
23need not be extended, for such payment. Nothing in this Section
24shall inhibit or restrict the authority of a governing body to
25determine the lien priority of any bonds, including alternate
26bonds, which may be issued with respect to any enterprise

 

 

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1revenues or revenue source.
2    In the event that alternate bonds shall have been issued
3and taxes, other than a designated revenue source, shall have
4been extended pursuant to the general obligation, full faith
5and credit promise supporting such alternate bonds, then the
6amount of such alternate bonds then outstanding shall be
7included in the computation of indebtedness of the governmental
8unit for purposes of all statutory provisions or limitations
9until such time as an audit of the governmental unit shall show
10that the alternate bonds have been paid from the enterprise
11revenues or revenue source, as applicable, pledged thereto for
12a complete fiscal year.
13    Alternate bonds may be issued to refund or advance refund
14alternate bonds without meeting any of the conditions set forth
15in this Section, except that the term of the refunding bonds
16shall not be longer than the term of the refunded bonds and
17that the debt service payable in any year on the refunding
18bonds shall not exceed the debt service payable in such year on
19the refunded bonds.
20    Once issued, alternate bonds shall be and forever remain
21until paid or defeased the general obligation of the
22governmental unit, for the payment of which its full faith and
23credit are pledged, and shall be payable from the levy of taxes
24as is provided in this Act for general obligation bonds.
25    The changes made by this amendatory Act of 1990 do not
26affect the validity of bonds authorized before September 1,

 

 

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11990.
2(Source: P.A. 97-542, eff. 8-23-11.)
 
3    Section 99. Effective date. This Act takes effect January
41, 2014.