Rep. David McSweeney

Filed: 3/6/2013

 

 


 

 


 
09800HB0983ham001LRB098 07872 HLH 42397 a

1
AMENDMENT TO HOUSE BILL 983

2    AMENDMENT NO. ______. Amend House Bill 983 by replacing
3everything after the enacting clause with the following:
 
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

 

 

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1the terms provided in Section 10 of this Act without reference
2to other provisions of law, but only upon the conditions
3provided in this Section. Alternate bonds shall not be regarded
4as or included in any computation of indebtedness for the
5purpose of any statutory provision or limitation except as
6expressly provided in this Section.
7    Such conditions are:
8    (a) Alternate bonds shall be issued for a lawful corporate
9purpose. If issued in lieu of revenue bonds, alternate bonds
10shall be issued for the purposes for which such revenue bonds
11shall have been authorized. If issued payable from a revenue
12source in the manner hereinafter provided, which revenue source
13is limited in its purposes or applications, then the alternate
14bonds shall be issued only for such limited purposes or
15applications. Alternate bonds may be issued payable from either
16enterprise revenues or revenue sources, or both.
17    (b) Alternate bonds shall be subject to backdoor
18referendum. The provisions of Section 5 of this Act shall apply
19to such backdoor referendum, together with the provisions
20hereof. The authorizing ordinance shall be published in a
21newspaper of general circulation in the governmental unit.
22Along with or as part of the authorizing ordinance, there shall
23be published a notice of (1) the specific number of voters
24required to sign a petition requesting that the issuance of the
25alternate bonds be submitted to referendum, (2) the time when
26such petition must be filed, (3) the date of the prospective

 

 

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1referendum, and (4), with respect to authorizing ordinances
2adopted on or after January 1, 1991, a statement that
3identifies any revenue source that will be used to pay debt
4service on the alternate bonds. The clerk or secretary of the
5governmental unit shall make a petition form available to
6anyone requesting one. If no petition is filed with the clerk
7or secretary within 45 30 days of publication of the
8authorizing ordinance and notice, the alternate bonds shall be
9authorized to be issued. But if within this 45-day 30 days
10period, a petition is filed with such clerk or secretary signed
11by the necessary number of electors numbering the greater of
12(i) 7.5% of the registered voters in the governmental unit or
13(ii) 200 of those registered voters or 15% of those registered
14voters, whichever is less, asking that the issuance of such
15alternate bonds be submitted to referendum, the clerk or
16secretary shall certify such question for submission at an
17election held in accordance with the general election law. The
18necessary number of electors for a governmental unit with more
19than 4,000 registered voters is the lesser of (i) 5% of the
20registered voters or (ii) 5,000 registered voters. The
21necessary number of electors for a governmental unit with 4,000
22or fewer registered voters is the lesser of (i) 15% of the
23registered voters or (ii) 200 registered voters. The question
24on the ballot shall include a statement of any revenue source
25that will be used to pay debt service on the alternate bonds.
26The alternate bonds shall be authorized to be issued if a

 

 

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1majority of the votes cast on the question at such election are
2in favor thereof provided that notice of the bond referendum,
3if held before July 1, 1999, has been given in accordance with
4the provisions of Section 12-5 of the Election Code in effect
5at the time of the bond referendum, at least 10 and not more
6than 45 days before the date of the election, notwithstanding
7the time for publication otherwise imposed by Section 12-5.
8Notices required in connection with the submission of public
9questions on or after July 1, 1999 shall be as set forth in
10Section 12-5 of the Election Code. Backdoor referendum
11proceedings for bonds and alternate bonds to be issued in lieu
12of such bonds may be conducted at the same time.
13    (c) To the extent payable from enterprise revenues, such
14revenues shall have been determined by the governing body to be
15sufficient to provide for or pay in each year to final maturity
16of such alternate bonds all of the following: (1) costs of
17operation and maintenance of the utility or enterprise, but not
18including depreciation, (2) debt service on all outstanding
19revenue bonds payable from such enterprise revenues, (3) all
20amounts required to meet any fund or account requirements with
21respect to such outstanding revenue bonds, (4) other
22contractual or tort liability obligations, if any, payable from
23such enterprise revenues, and (5) in each year, an amount not
24less than 1.25 times debt service of all (i) alternate bonds
25payable from such enterprise revenues previously issued and
26outstanding and (ii) alternate bonds proposed to be issued. To

 

 

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1the extent payable from one or more revenue sources, such
2sources shall have been determined by the governing body to
3provide in each year, an amount not less than 1.25 times debt
4service of all alternate bonds payable from such revenue
5sources previously issued and outstanding and alternate bonds
6proposed to be issued. The 1.25 figure in the preceding
7sentence shall be reduced to 1.10 if the revenue source is a
8governmental revenue source. The conditions enumerated in this
9subsection (c) need not be met for that amount of debt service
10provided for by the setting aside of proceeds of bonds or other
11moneys at the time of the delivery of such bonds.
12    (c-1) In the case of alternate bonds issued as variable
13rate bonds (including refunding bonds), debt service shall be
14projected based on the rate for the most recent date shown in
15the 20 G.O. Bond Index of average municipal bond yields as
16published in the most recent edition of The Bond Buyer
17published in New York, New York (or any successor publication
18or index, or if such publication or index is no longer
19published, then any index of long-term municipal tax-exempt
20bond yields selected by the governmental unit), as of the date
21of determination referred to in subsection (c) of this Section.
22Any interest or fees that may be payable to the provider of a
23letter of credit, line of credit, surety bond, bond insurance,
24or other credit enhancement relating to such alternate bonds
25and any fees that may be payable to any remarketing agent need
26not be taken into account for purposes of such projection. If

 

 

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1the governmental unit enters into an agreement in connection
2with such alternate bonds at the time of issuance thereof
3pursuant to which the governmental unit agrees for a specified
4period of time to pay an amount calculated at an agreed-upon
5rate or index based on a notional amount and the other party
6agrees to pay the governmental unit an amount calculated at an
7agreed-upon rate or index based on such notional amount,
8interest shall be projected for such specified period of time
9on the basis of the agreed-upon rate payable by the
10governmental unit.
11    (d) The determination of the sufficiency of enterprise
12revenues or a revenue source, as applicable, shall be supported
13by reference to the most recent audit of the governmental unit,
14which shall be for a fiscal year ending not earlier than 18
15months previous to the time of issuance of the alternate bonds.
16If such audit does not adequately show such enterprise revenues
17or revenue source, as applicable, or if such enterprise
18revenues or revenue source, as applicable, are shown to be
19insufficient, then the determination of sufficiency shall be
20supported by the report of an independent accountant or
21feasibility analyst, the latter having a national reputation
22for expertise in such matters, who is not otherwise involved in
23the project, demonstrating the sufficiency of such revenues and
24explaining, if appropriate, by what means the revenues will be
25greater than as shown in the audit. Whenever such sufficiency
26is demonstrated by reference to a schedule of higher rates or

 

 

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1charges for enterprise revenues or a higher tax imposition for
2a revenue source, such higher rates, charges or taxes shall
3have been properly imposed by an ordinance adopted prior to the
4time of delivery of alternate bonds. The reference to and
5acceptance of an audit or report, as the case may be, and the
6determination of the governing body as to sufficiency of
7enterprise revenues or a revenue source shall be conclusive
8evidence that the conditions of this Section have been met and
9that the alternate bonds are valid.
10    (e) The enterprise revenues or revenue source, as
11applicable, shall be in fact pledged to the payment of the
12alternate bonds; and the governing body shall covenant, to the
13extent it is empowered to do so, to provide for, collect and
14apply such enterprise revenues or revenue source, as
15applicable, to the payment of the alternate bonds and the
16provision of not less than an additional .25 (or .10 for
17governmental revenue sources) times debt service. The pledge
18and establishment of rates or charges for enterprise revenues,
19or the imposition of taxes in a given rate or amount, as
20provided in this Section for alternate bonds, shall constitute
21a continuing obligation of the governmental unit with respect
22to such establishment or imposition and a continuing
23appropriation of the amounts received. All covenants relating
24to alternate bonds and the conditions and obligations imposed
25by this Section are enforceable by any bondholder of alternate
26bonds affected, any taxpayer of the governmental unit, and the

 

 

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1People of the State of Illinois acting through the Attorney
2General or any designee, and in the event that any such action
3results in an order finding that the governmental unit has not
4properly set rates or charges or imposed taxes to the extent it
5is empowered to do so or collected and applied enterprise
6revenues or any revenue source, as applicable, as required by
7this Act, the plaintiff in any such action shall be awarded
8reasonable attorney's fees. The intent is that such enterprise
9revenues or revenue source, as applicable, shall be sufficient
10and shall be applied to the payment of debt service on such
11alternate bonds so that taxes need not be levied, or if levied
12need not be extended, for such payment. Nothing in this Section
13shall inhibit or restrict the authority of a governing body to
14determine the lien priority of any bonds, including alternate
15bonds, which may be issued with respect to any enterprise
16revenues or revenue source.
17    In the event that alternate bonds shall have been issued
18and taxes, other than a designated revenue source, shall have
19been extended pursuant to the general obligation, full faith
20and credit promise supporting such alternate bonds, then the
21amount of such alternate bonds then outstanding shall be
22included in the computation of indebtedness of the governmental
23unit for purposes of all statutory provisions or limitations
24until such time as an audit of the governmental unit shall show
25that the alternate bonds have been paid from the enterprise
26revenues or revenue source, as applicable, pledged thereto for

 

 

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1a complete fiscal year.
2    Alternate bonds may be issued to refund or advance refund
3alternate bonds without meeting any of the conditions set forth
4in this Section, except that the term of the refunding bonds
5shall not be longer than the term of the refunded bonds and
6that the debt service payable in any year on the refunding
7bonds shall not exceed the debt service payable in such year on
8the refunded bonds.
9    Once issued, alternate bonds shall be and forever remain
10until paid or defeased the general obligation of the
11governmental unit, for the payment of which its full faith and
12credit are pledged, and shall be payable from the levy of taxes
13as is provided in this Act for general obligation bonds.
14    The changes made by this amendatory Act of 1990 do not
15affect the validity of bonds authorized before September 1,
161990.
17(Source: P.A. 97-542, eff. 8-23-11.)
 
18    Section 99. Effective date. This Act takes effect upon
19becoming law.".