Sen. Pamela J. Althoff

Filed: 5/17/2013

 

 


 

 


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

 

 

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1publication of the authorizing ordinance and notice, the
2alternate bonds shall be authorized to be issued. But if,
3within this 45-day period, a petition is filed with such clerk
4or secretary signed by the necessary number of electors, asking
5that the issuance of such alternate bonds be submitted to
6referendum, the clerk or secretary shall certify such question
7for submission at an election held in accordance with the
8general election law. For purposes of this paragraph, the
9necessary number of electors for a governmental unit with more
10than 4,000 registered voters is the lesser of (i) 5% of the
11registered voters or (ii) 5,000 registered voters; and the
12necessary number of electors for a governmental unit with 4,000
13or fewer registered voters is the lesser of (i) 15% of the
14registered voters or (ii) 200 registered voters.
15Notwithstanding any of the above, any double-barrelled bond
16authorization submitted by a school district that is a
17beneficiary of a county-wide supplemental sales and use tax
18approved by front door referendum for educational purposes
19shall be exempted from the 45-day petition period created under
20this Section.
21    The question on the ballot shall include a statement of any
22revenue source that will be used to pay debt service on the
23alternate bonds. The alternate bonds shall be authorized to be
24issued if a majority of the votes cast on the question at such
25election are in favor thereof provided that notice of the bond
26referendum, if held before July 1, 1999, has been given in

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1alternate bonds without meeting any of the conditions set forth
2in this Section, except that the term of the refunding bonds
3shall not be longer than the term of the refunded bonds and
4that the debt service payable in any year on the refunding
5bonds shall not exceed the debt service payable in such year on
6the refunded bonds.
7    Once issued, alternate bonds shall be and forever remain
8until paid or defeased the general obligation of the
9governmental unit, for the payment of which its full faith and
10credit are pledged, and shall be payable from the levy of taxes
11as is provided in this Act for general obligation bonds.
12    The changes made by this amendatory Act of 1990 do not
13affect the validity of bonds authorized before September 1,
141990.
15(Source: P.A. 97-542, eff. 8-23-11.)
 
16    Section 99. Effective date. This Act takes effect January
171, 2014.".