Rep. David McSweeney

Filed: 3/12/2013

 

 


 

 


 
09800HB0983ham002LRB098 07872 HLH 42902 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.
7    In governmental units with 500,000 or more inhabitants, if
8If no petition is filed with the clerk or secretary within 30
9days of publication of the authorizing ordinance and notice,
10the alternate bonds shall be authorized to be issued. But if
11within this 30 days period, a petition is filed with such clerk
12or secretary signed by electors numbering the greater of (i)
137.5% of the registered voters in the governmental unit or (ii)
14200 of those registered voters or 15% of those registered
15voters, whichever is less, asking that the issuance of such
16alternate bonds be submitted to referendum, the clerk or
17secretary shall certify such question for submission at an
18election held in accordance with the general election law.
19    In governmental units with fewer than 500,000 inhabitants,
20if no petition is filed with the clerk or secretary within 45
21days of publication of the authorizing ordinance and notice,
22the alternate bonds shall be authorized to be issued. But if,
23within this 45-day period, a petition is filed with such clerk
24or secretary signed by the necessary number of electors, asking
25that the issuance of such alternate bonds be submitted to
26referendum, the clerk or secretary shall certify such question

 

 

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1for submission at an election held in accordance with the
2general election law. In governmental units with fewer than
3500,000 inhabitants, the necessary number of electors for a
4governmental unit with more than 4,000 registered voters is the
5lesser of (i) 5% of the registered voters or (ii) 5,000
6registered voters. The necessary number of electors for a
7governmental unit with 4,000 or fewer registered voters is the
8lesser of (i) 15% of the registered voters or (ii) 200
9registered voters.
10    The question on the ballot shall include a statement of any
11revenue source that will be used to pay debt service on the
12alternate bonds. The alternate bonds shall be authorized to be
13issued if a majority of the votes cast on the question at such
14election are in favor thereof provided that notice of the bond
15referendum, if held before July 1, 1999, has been given in
16accordance with the provisions of Section 12-5 of the Election
17Code in effect at the time of the bond referendum, at least 10
18and not more than 45 days before the date of the election,
19notwithstanding the time for publication otherwise imposed by
20Section 12-5. Notices required in connection with the
21submission of public questions on or after July 1, 1999 shall
22be as set forth in Section 12-5 of the Election Code. Backdoor
23referendum proceedings for bonds and alternate bonds to be
24issued in lieu of such bonds may be conducted at the same time.
25    (c) To the extent payable from enterprise revenues, such
26revenues shall have been determined by the governing body to be

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1affect the validity of bonds authorized before September 1,
21990.
3(Source: P.A. 97-542, eff. 8-23-11.)
 
4    Section 99. Effective date. This Act takes effect upon
5becoming law.".