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Public Act 093-0009


 

Public Act 93-0009 of the 93rd General Assembly


Public Act 93-0009

SB1601 Enrolled                      LRB093 02811 SJM 02827 b

    AN ACT concerning finance.

    WHEREAS,   The   General   Assembly   takes   note   that
governmental units in the State  must  borrow  funds  in  the
current  bond  market,  and  the  issuance  of bonds or other
obligations as what are commonly referred to as variable rate
demand bonds, auction bonds, or  commercial  paper  bonds  is
ever  increasing,  and  is  frequently the most advisable and
economic means of borrowing; and

    WHEREAS, It is sometimes most advantageous in  connection
with  such  borrowings  to  enter  into cap, collar, swap, or
other derivative  transactions  relating  to  interest  rates
which  serve to hedge interest rate risk and it is frequently
necessary to procure credit enhancement in the forms commonly
referred to as municipal bond insurance, letters  of  credit,
lines  of credit, standby bond purchase agreements, or surety
bonds,  and  the  like,  in  such  demand  bond  and  similar
transactions; and

    WHEREAS, Existing law authorizes such  transactions,  but
it  is  advisable  for  the  law  to  be more fully stated to
accommodate same, expressly  permitting  certain  aspects  of
such transactions; therefore

    Be  it  enacted  by  the People of the State of Illinois,
represented in the General Assembly:

    Section 3.  The State Finance Act is amended by  changing
Section 6z-45 as follows:

    (30 ILCS 105/6z-45)
    Sec. 6z-45.  The School Infrastructure Fund.
    (a)  The  School  Infrastructure  Fund  is  created  as a
special fund in the State Treasury.
    In addition to any  other  deposits  authorized  by  law,
beginning January 1, 2000, on the first day of each month, or
as  soon  thereafter as may be practical, the State Treasurer
and State Comptroller shall transfer the  sum  of  $5,000,000
from  the  General  Revenue Fund to the School Infrastructure
Fund; provided, however, that no such transfers shall be made
from July 1, 2001 through June 30, 2003.
    (b)  Subject to the transfer provisions set forth  below,
money  in  the  School Infrastructure Fund shall, if and when
the State of Illinois incurs any bonded indebtedness for  the
construction   of   school   improvements  under  the  School
Construction Law, be set aside and used for  the  purpose  of
paying and discharging annually the principal and interest on
that  bonded  indebtedness  then  due and payable, and for no
other purpose.
    In addition to other transfers to the General  Obligation
Bond Retirement and Interest Fund made pursuant to Section 15
of  the  General  Obligation  Bond Act, upon each delivery of
bonds issued for construction of  school  improvements  under
the  School  Construction  Law,  the  State Comptroller shall
compute and certify to the State Treasurer the  total  amount
of  principal  of,  interest on, and premium, if any, on such
bonds during the then  current  and  each  succeeding  fiscal
year.   With respect to the interest payable on variable rate
bonds, such certifications shall be calculated at the maximum
rate of interest that may be payable during the fiscal  year,
after  taking  into  account  any  credits  permitted  in the
related indenture or other instrument against the  amount  of
such interest required to be appropriated for that period.
    On  or  before  the  last  day  of  each month, the State
Treasurer and  State  Comptroller  shall  transfer  from  the
School  Infrastructure  Fund  to  the General Obligation Bond
Retirement and Interest Fund an amount sufficient to pay  the
aggregate  of  the principal of, interest on, and premium, if
any, on the bonds payable on their next payment date, divided
by the number of monthly transfers occurring between the last
previous payment date (or the delivery  date  if  no  payment
date has yet occurred) and the next succeeding payment  date.
Interest  payable  on variable rate bonds shall be calculated
at the maximum rate of interest that may be payable  for  the
relevant  period,  after  taking  into  account  any  credits
permitted  in  the  related  indenture  or  other  instrument
against   the   amount   of  such  interest  required  to  be
appropriated for that period.  Interest for which moneys have
already been deposited into the capitalized interest  account
within  the  General  Obligation Bond Retirement and Interest
Fund shall not be included in the calculation of the  amounts
to be transferred under this subsection.
    (c)  The  surplus,  if  any, in the School Infrastructure
Fund after the payment of  principal  and  interest  on  that
bonded  indebtedness  then  annually  due  shall,  subject to
appropriation, be used as follows:
    First - to make  3  payments  to  the  School  Technology
Revolving Loan Fund as follows:
         Transfer of $30,000,000 in fiscal year 1999;
         Transfer of $20,000,000 in fiscal year 2000; and
         Transfer of $10,000,000 in fiscal year 2001.
    Second  -  to  pay  the  expenses  of  the State Board of
Education and the Capital Development Board in  administering
programs   under  the  School  Construction  Law,  the  total
expenses not to exceed $1,200,000 in any fiscal year.
    Third - to pay any amounts  due  for  grants  for  school
construction  projects  and  debt  service  under  the School
Construction Law.
    Fourth - to pay any amounts due  for  grants  for  school
maintenance projects under the School Construction Law.
(Source:  P.A.  91-38,  eff.  6-15-99;  91-711,  eff. 7-1-00;
92-11, eff. 6-11-01; 92-600, eff. 6-28-02.)
    Section 5.  The Bond  Authorization  Act  is  amended  by
changing Sections 7, 9, 14 and 15 as follows:

    (30 ILCS 305/7) (from Ch. 17, par. 6607)
    Sec.  7.  Interest  rate  swaps.  For  purposes  of  this
Section,  terms  are  as defined in the Local Government Debt
Reform Act. With respect to all  or  part  of  any  currently
outstanding  or  proposed  issue of its bonds, a governmental
unit public corporation whose aggregate principal  amount  of
bonds   outstanding  or  proposed  exceeds  $10,000,000  may,
without  prior  appropriation,  enter  into   agreements   or
contracts  with  any  necessary  or  appropriate  person (the
counter party) that will have the benefit of providing to the
governmental unit: (i) public corporation  an  interest  rate
basis,  cash  flow  basis, or other basis different from that
provided in the bonds for the payment  of  interest  or  (ii)
with  respect to a future delivery of bonds, one or more of a
guaranteed interest rate,  interest  rate  basis,  cash  flow
basis,  or  purchase  price.     Such agreements or contracts
include without limitation agreements or  contracts  commonly
known  as  "interest  rate  swap,  collar, cap, or derivative
agreements",   "forward   payment   conversion   agreements",
interest rate locks, forward bond purchase  agreements,  bond
warrant  agreements,  or  bond purchase option agreements and
also include agreements or contracts providing  for  payments
based  on levels of or changes in interest rates, including a
change in an interest rate index, to exchange cash flows or a
series of payments, or to  hedge  payment,  rate  spread,  or
similar exposure (such agreements or contracts, collectively,
being "swaps").  Without limiting other permitted terms which
may be included in swaps, the following provisions may or, if
hereinafter so required, shall apply:
    (a)  Payments made pursuant to a swap (the swap payments)
which are to be made by the governmental unit may be paid  by
such  governmental unit, without limitation, from proceeds of
the bonds, including bonds for future delivery, identified to
such swaps, or from bonds issued to  refund  such  bonds,  or
from   whatever   enterprise   revenues  or  revenue  source,
including taxes pledged or to be pledged to  the  payment  of
such  bonds,  which enterprise revenues or revenue source may
be increased to make such swap payments, and swap payments to
be received by the governmental unit, which may be  periodic,
up-front,  or  on  termination,  shall be used solely for and
limited to any lawful corporate purpose of  the  governmental
unit.
    (b)  Up-front or periodic net swap payments to be paid by
the  governmental  unit  under  the  swaps (the standard swap
payments) such agreements or contracts shall  be  treated  as
interest  for  the  purpose  of calculating any interest rate
limit applicable to the bonds, provided,  however,  that  for
purposes  of making such standard swap payments only (and not
with respect to the bonds so issued or  to  be  issued),  the
bonds  shall  be deemed not exempt from income taxation under
the Internal Revenue Code  for  purposes  of  State  law,  as
contained  in  this  Bond  Authorization Act, relating to the
permissible rate  of  interest  to  be  borne  thereon,  and,
provided  further,  that  if  payments  of  any standard swap
payments are to be made by  the  governmental  unit  and  the
counterparty  on  different  dates,  the  net  effect of such
payments for purposes of such interest rate limitation  shall
be determined using a true interest cost (yield) calculation.
    (c)  Any such agreement or contract and the swap payments
to  be  made  thereunder shall not be taken into account with
respect to any debt limit applicable to the governmental unit
public corporation.
    (d)  Swap payments upon the termination of any  swap  may
be paid to a counterparty upon any terms customary for swaps,
including,   without   limitation,  provisions  using  market
quotations available for giving the net benefit of  the  swap
at  the  time  of termination to the persons entitled thereto
(viz.,  the  governmental  unit  or  the   counterparty)   or
reasonable  fair  market value determinations of the value at
termination made in good faith by either such persons.
    (e)  The term of the swap shall not exceed  the  term  of
any  currently  outstanding bonds identified to such swap or,
for bonds to be delivered, not greater than 5 years plus  the
term of years proposed for such bonds to be delivered, but in
no  event  longer than 40 years, plus, in each case, any time
period necessary to cure any defaults under such swap.
    (f)  The choice of law for enforcement of swaps as to any
counterparty may be  made  for  any  state  of  these  United
States,  but  the law which shall apply to the obligations of
the governmental unit shall  be  the  law  of  the  State  of
Illinois,  and  jurisdiction  to enforce the swaps as against
the governmental units shall be exclusively in the courts  of
the  State  of  Illinois  or  in the applicable federal court
having jurisdiction and located within the State of Illinois.
    (g)  Governmental units, in entering into swaps, may  not
waive  any  sovereign  immunities from time to time available
under the laws of the State of Illinois as  to  jurisdiction,
procedures,  and  remedies, but such swaps shall otherwise be
fully enforceable as valid and binding contracts  as  and  to
the extent provided herein and by other applicable law.
(Source: P.A. 87-1176.)

    (30 ILCS 330/9) (from Ch. 127, par. 659)
    Sec.  9.  Conditions  for  Issuance  and  Sale of Bonds -
Requirements for Bonds.
    (a)  Bonds shall be issued and sold from time to time, in
one or more series, in such amounts and at such prices as may
be directed by  the  Governor,  upon  recommendation  by  the
Director  of the Bureau of the Budget. Bonds shall be in such
form (either coupon,  registered  or  book  entry),  in  such
denominations,  payable  within  30  years  from  their date,
subject to such terms of redemption with or without  premium,
bear  interest  payable  at  such  times and at such fixed or
variable rate or rates, and be dated as shall  be  fixed  and
determined by the Director of the Bureau of the Budget in the
order  authorizing  the  issuance  and  sale of any series of
Bonds, which order shall be approved by the Governor  and  is
herein  called  a  "Bond  Sale Order"; provided however, that
interest payable at fixed or variable rates shall not  exceed
that  permitted  in  the  Bond  Authorization  Act, as now or
hereafter amended.  Said Bonds shall be payable at such place
or places, within or without the State of Illinois,  and  may
be  made  registrable  as  to  either principal or as to both
principal and interest, as shall be  specified  in  the  Bond
Sale Order.  Bonds may be callable or subject to purchase and
retirement  or tender and remarketing as fixed and determined
in the Bond Sale Order.
    In the case of any series of Bonds bearing interest at  a
variable  interest  rate  ("Variable Rate Bonds"), in lieu of
determining the  rate  or  rates  at  which  such  series  of
Variable  Rate  Bonds  shall  bear  interest and the price or
prices at which such Variable Rate Bonds shall  be  initially
sold  or  remarketed (in the event of purchase and subsequent
resale), the Bond Sale Order may provide that  such  interest
rates  and  prices  may  vary  from time to time depending on
criteria established in such Bond Sale Order, which  criteria
may  include,  without  limitation,  references to indices or
variations in interest rates as may, in  the  judgment  of  a
remarketing  agent, be necessary to cause Variable Rate Bonds
of such series to be remarketable from  time  to  time  at  a
price  equal  to  their principal amount, and may provide for
appointment of a bank, trust  company,  investment  bank,  or
other  financial institution to serve as remarketing agent in
that connection.   The  Bond  Sale  Order  may  provide  that
alternative  interest  rates  or  provisions for establishing
alternative  interest  rates,  different  security  or  claim
priorities, or different call or amortization provisions will
apply during such times as Variable Rate Bonds of any  series
are   held   by   a  person  providing  credit  or  liquidity
enhancement arrangements for  such  Bonds  as  authorized  in
subsection (b) of this Section.  The Bond Sale Order may also
provide  for  such  variable interest rates to be established
pursuant to a process generally  known  as  an  auction  rate
process  and  may  provide  for  appointment  of  one or more
financial  institutions  to  serve  as  auction  agents   and
broker-dealers  in  connection with the establishment of such
interest rates and the sale and remarketing of such Bonds.
    (b)  In connection with the issuance  of  any  series  of
Bonds,  the  State  may  enter  into  arrangements to provide
additional security and liquidity for such Bonds,  including,
without  limitation,  bond  or  interest  rate  insurance  or
letters  of credit, lines of credit, bond purchase contracts,
or other arrangements whereby funds  are  made  available  to
retire  or  purchase  Bonds,  thereby assuring the ability of
owners of the Bonds to sell or redeem their Bonds.  The State
may enter into contracts and may agree to pay fees to persons
providing such arrangements,  but  only  under  circumstances
where the Director of the Bureau of the Budget certifies that
he or she reasonably expects the total interest paid or to be
paid   on   the   Bonds,  together  with  the  fees  for  the
arrangements (being treated as if interest), would not, taken
together, cause the Bonds to  bear  interest,  calculated  to
their  stated  maturity, at a rate in excess of the rate that
the Bonds would bear in the absence of such arrangements.
    The  State  may,  with  respect  to   Bonds   issued   or
anticipated  to  be  issued,  participate  in  and enter into
arrangements with respect  to  interest  rate  protection  or
exchange   agreements,   guarantees,   or  financial  futures
contracts for the purpose of limiting or restricting interest
rate risk.  The arrangements may be executed and delivered by
the Director of the Bureau of the Budget  on  behalf  of  the
State.   Net  payments for such arrangements shall constitute
interest on the Bonds and shall  be  paid  from  the  General
Obligation  Bond  Retirement and Interest Fund.  The Director
of the Bureau of the Budget shall at least  annually  certify
to the Governor and the State Comptroller his or her estimate
of  the  amounts  of  such net payments to be included in the
calculation of interest required to be paid by the State.
    (c)  Prior to the issuance of  any  Variable  Rate  Bonds
pursuant to subsection (a), the Director of the Bureau of the
Budget  shall  adopt  an interest rate risk management policy
providing that  the  amount  of  the  State's  variable  rate
exposure  with  respect  to Bonds shall not exceed 20%.  This
policy shall remain in effect while any Bonds are outstanding
and the issuance of Bonds shall be subject to  the  terms  of
such  policy.  The  terms  of this policy may be amended from
time to time by the Director of the Bureau of the Budget  but
in  no event shall any amendment cause the permitted level of
the State's variable rate exposure with respect to  Bonds  to
exceed 20%.
(Source:  P.A.  91-39,  eff.  6-15-99;  91-357, eff. 7-29-99;
92-16, eff. 6-28-01.)

    (30 ILCS 330/14) (from Ch. 127, par. 664)
    Sec. 14.  Repayment.
    (a)  To provide for the manner of repayment of Bonds, the
Governor shall include an appropriation in each annual  State
Budget  of  monies  in  such amount as shall be necessary and
sufficient, for the period covered by such budget, to pay the
interest, as it shall accrue, on all Bonds issued under  this
Act,  to  pay  and  discharge  the principal of such Bonds as
shall, by their terms, fall due during such  period,  and  to
pay  a  premium, if any, on Bonds to be redeemed prior to the
maturity date.  Amounts included in such  appropriations  for
the  payment  of interest on variable rate bonds shall be the
maximum amounts of interest  that  may  be  payable  for  the
period  covered  by the budget, after taking into account any
credits  permitted  in  the  related   indenture   or   other
instrument against the amount of such interest required to be
appropriated  for  such  period.   Amounts  included  in such
appropriations for the payment of interest shall include  the
amounts certified by the Director of the Bureau of the Budget
under subsection (b) of Section 9 of this Act.
    (b)  A  separate  fund  in  the State Treasury called the
"General Obligation Bond Retirement  and  Interest  Fund"  is
hereby created.
    (c)  The    General    Assembly   shall   annually   make
appropriations to pay the  principal  of,  interest  on,  and
premium,  if  any,  on  Bonds  sold  under  this Act from the
General  Obligation  Bond  Retirement  and   Interest   Fund.
Amounts  included  in  such appropriations for the payment of
interest on variable rate bonds shall be the maximum  amounts
of interest that may be payable during the fiscal year, after
taking  into  account  any  credits  permitted in the related
indenture or other instrument  against  the  amount  of  such
interest   required  to  be  appropriated  for  such  period.
Amounts included in such appropriations for  the  payment  of
interest  shall include the amounts certified by the Director
of the Bureau of the Budget under subsection (b) of Section 9
of this Act.
    If for any reason there are insufficient funds in  either
the  General  Revenue Fund or the Road Fund to make transfers
to the General Obligation Bond Retirement and  Interest  Fund
as  required  by Section 15 of this Act, or if for any reason
the General Assembly fails to make appropriations  sufficient
to pay the principal of, interest on, and premium, if any, on
the  Bonds, as the same by their terms shall become due, this
Act  shall   constitute   an   irrevocable   and   continuing
appropriation  of all amounts necessary for that purpose, and
the irrevocable and continuing authority for and direction to
the State Treasurer and the Comptroller to make the necessary
transfers,  as  directed  by  the  Governor,   out   of   and
disbursements from the revenues and funds of the State.
    (d)  If,  because  of  insufficient  funds  in either the
General Revenue Fund or  the  Road  Fund,  monies  have  been
transferred  to  the  General  Obligation Bond Retirement and
Interest Fund, as required by subsection (c) of this Section,
this Act shall  constitute  the  irrevocable  and  continuing
authority  for  and  direction  to  the  State  Treasurer and
Comptroller to reimburse these funds of the  State  from  the
General  Revenue  Fund  or  the Road Fund, as appropriate, by
transferring, at such times and in such amounts, as  directed
by  the  Governor,  an  amount  to  these funds equal to that
transferred from them.
(Source: P.A. 83-1490.)

    (30 ILCS 330/15) (from Ch. 127, par. 665)
    Sec.  15.  Computation   of   Principal   and   Interest;
transfers.
    (a)  Upon  each delivery of Bonds authorized to be issued
under this Act, the Comptroller shall compute and certify  to
the  Treasurer the total amount of principal of, interest on,
and premium, if any, on Bonds issued that will be payable  in
order  to  retire  such Bonds and the amount of principal of,
interest on and premium, if any, on such Bonds that  will  be
payable  on  each payment date according to the tenor of such
Bonds during the then  current  and  each  succeeding  fiscal
year.   With respect to the interest payable on variable rate
bonds, such certifications shall be calculated at the maximum
rate of interest that may be payable during the fiscal  year,
after  taking  into  account  any  credits  permitted  in the
related indenture or other instrument against the  amount  of
such  interest  required  to  be appropriated for such period
pursuant to subsection (c) of Section 14 of this  Act.   With
respect  to  the  interest payable, such certifications shall
include the amounts certified by the Director of  the  Bureau
of the Budget under subsection (b) of Section 9 of this Act.
    On  or  before  the  last  day  of  each  month the State
Treasurer and Comptroller shall transfer from  (1)  the  Road
Fund  with  respect  to  Bonds  issued under paragraph (a) of
Section 4 of this Act or Bonds  issued  for  the  purpose  of
refunding  such bonds, and from (2) the General Revenue Fund,
with respect to all other Bonds issued under this Act, to the
General Obligation  Bond  Retirement  and  Interest  Fund  an
amount  sufficient  to pay the aggregate of the principal of,
interest on, and premium, if any, on Bonds payable, by  their
terms  on the next payment date divided by the number of full
calendar months between the date of such Bonds and the  first
such  payment  date, and thereafter, divided by the number of
months between each succeeding payment date after the  first.
Such computations and transfers shall be made for each series
of  Bonds issued and delivered.  Interest payable on variable
rate bonds  shall  be  calculated  at  the  maximum  rate  of
interest  that  may be payable for the relevant period, after
taking into account any  credits  permitted  in  the  related
indenture  or  other  instrument  against  the amount of such
interest required to be appropriated for such period pursuant
to subsection (c) of Section 14 of this Act.  Computations of
interest shall include the amounts certified by the  Director
of the Bureau of the Budget under subsection (b) of Section 9
of  this  Act.   Interest  for which moneys have already been
deposited into the capitalized interest  account  within  the
General  Obligation  Bond  Retirement and Interest Fund shall
not be included in the  calculation  of  the  amounts  to  be
transferred under this subsection.
    The  transfer  of monies herein and above directed is not
required if monies in the General Obligation Bond  Retirement
and  Interest  Fund  are more than the amount otherwise to be
transferred as herein above provided, and if the Governor  or
his  authorized  representative  notifies the State Treasurer
and Comptroller of such fact in writing.
    (b)  After the effective date of this  Act,  the  balance
of,  and  monies  directed  to  be  included  in  the Capital
Development Bond Retirement and Interest Fund, Anti-Pollution
Bond  Retirement  and  Interest  Fund,  Transportation  Bond,
Series A Retirement and Interest Fund,  Transportation  Bond,
Series  B  Retirement and Interest Fund, and Coal Development
Bond Retirement and Interest Fund shall be transferred to and
deposited in  the  General  Obligation  Bond  Retirement  and
Interest  Fund.  This Fund shall be used to make debt service
payments on the State's general obligation  Bonds  heretofore
issued  which  are now outstanding and payable from the Funds
herein listed as well as on Bonds issued under this Act.
    (c)  The unused portion of federal funds received  for  a
capital  facilities  project,  as  authorized by Section 3 of
this Act, for which monies from the Capital Development  Fund
have  been expended shall be deposited upon completion of the
project  in  the  General  Obligation  Bond  Retirement   and
Interest  Fund.  Any  federal funds received as reimbursement
for  the  completed  construction  of  a  capital  facilities
project, as authorized by Section 3 of this  Act,  for  which
monies  from  the Capital Development Fund have been expended
shall be deposited in the General Obligation Bond  Retirement
and Interest Fund.
(Source: P.A. 93-2, eff. 4-7-03.)

    Section  10.  The Local Government Credit Enhancement Act
is amended by changing Sections 2 and 3 as follows:

    (50 ILCS 410/2) (from Ch. 85, par. 4302)
    Sec. 2.  For the purposes  of  this  Act,  terms  are  as
defined  in  the Local Government Debt Reform Act. unless the
context requires otherwise:
    (a)  "Unit of local government" shall  have  the  meaning
ascribed  to  it  in  Article  VII, Section 1 of the Illinois
Constitution.
    (b)  "School district" means any public  school  district
organized under the School Code or prior law and includes any
dual  or  unit school district, high school district, special
charter district  and  non-high  school  district.    "School
district" also means any community college district organized
under the Public Community College Act or prior law.
    (c)  "Governing board" means the corporate authorities of
the  municipality,  county board, board of trustees, board of
education, board of school directors, or other governing body
of the unit of local government or school district.
(Source: P.A. 83-1536.)

    (50 ILCS 410/3) (from Ch. 85, par. 4303)
    Sec. 3.  In connection with the issuance of its bonds and
notes, a governmental unit  of  local  government  or  school
district   may  enter  into  agreements  (credit  agreements)
arrangements to provide additional security or and liquidity,
or both, for the bonds and notes.  These may include, without
limitation, municipal  bond  insurance,  letters  of  credit,
lines  of  credit,  standby  bond purchase agreements, surety
bonds, and the like, by which the governmental unit of  local
government  or  school  district  may  borrow funds to pay or
redeem or purchase and hold its bonds and a governmental unit
may enter into agreements for the purchase or remarketing  of
bonds  (remarketing  agreements) arrangements for providing a
mechanism for remarketing  bonds  tendered  for  purchase  in
accordance   with  their  terms.  The  term  of  such  credit
agreements or remarketing agreements  shall  not  exceed  the
term of the bonds, plus any time period necessary to cure any
defaults under such agreements assuring the ability of owners
of  the issuing local government's or school district's bonds
to sell or to have redeemed their bonds.  The unit  of  local
government  or  school  district may enter into contracts and
may agree to pay fees to persons providing such arrangements,
including from bond proceeds.
    Without limiting the terms which may be included  in  any
such   credit   agreements  or  remarketing  agreements,  the
ordinance The resolution of the governing  board  authorizing
the issuance of the bonds may or, if hereinafter so required,
shall provide as follows:
    (a)  that  Interest rates on the bonds may vary from time
to time depending upon criteria established by the  governing
body  board,  which  may  include, without limitation: (i), a
variation in interest rates as  may  be  necessary  to  cause
bonds  to  be  remarketed remarketable from time to time at a
price equal  to  their  principal  amount  plus  any  accrued
interest;  (ii)  rates set by auctions; or (iii) rates set by
formula. and may provide for appointment of,
    (b)  A national banking association, bank, trust company,
investment banker  or  other  financial  institution  may  be
appointed to serve as a remarketing agent in that connection,
and  such remarketing agent may be delegated authority by the
governing body to determine interest rates in accordance with
criteria established by the governing body.   The  resolution
of  the governing board authorizing the issuance of the bonds
may provide that
    (c)  Alternative interest rates or  provisions  may  will
apply during such times as the bonds are held by the a person
or persons (financial providers) providing a credit agreement
or  remarketing  agreement  letter  of credit or other credit
enhancement arrangement  for  those  bonds  and  during  such
times,  the  interest  on  the bonds may be deemed not exempt
from income taxation under  the  Internal  Revenue  Code  for
purposes of State law, as contained in the Bond Authorization
Act, relating to the permissible rate of interest to be borne
thereon.
    (d)  Fees   may  be  paid  to  the  financial  providers,
including all reasonably  related  costs,  including  therein
costs  of enforcement and litigation (all such fees and costs
being financial provider  payments)  and  financial  provider
payments  may  be  paid, without limitation, from proceeds of
the bonds being the subject of such agreements, or from bonds
issued to refund such  bonds,  or  from  whatever  enterprise
revenues  or  revenue source, including taxes, pledged to the
payment of such bonds, which enterprise revenues  or  revenue
source  may  be  increased  to  make  such financial provider
payments, and such financial provider payments shall be  made
subordinate to the payments on the bonds.
    (e)  The  bonds  need not be held in physical form by the
financial providers when providing funds to purchase or carry
the  bonds  from   others   but   may   be   represented   in
uncertificated  form  in the credit agreements or remarketing
agreements.
    (f)  The debt or  obligation  of  the  governmental  unit
represented  by  a bond tendered for purchase to or otherwise
made  available  to  the  governmental  unit  and   thereupon
acquired  by  either  such  governmental  unit or a financial
provider shall not be deemed to be extinguished for  purposes
of  State law until cancelled by the governmental unit or its
agent.
    (g)  The choice of law for the obligations of a financial
provider may be made for any state of  these  United  States,
but  the  law  which  shall  apply  to the obligations of the
governmental unit shall be the law of the State of  Illinois,
and   jurisdiction   to  enforce  such  credit  agreement  or
remarketing agreement as against the governmental unit  shall
be  exclusively  in the courts of the State of Illinois or in
the applicable federal court having jurisdiction and  located
within the State of Illinois.
    (h)  The  governmental  unit  may not waive any sovereign
immunities from time to time available under the laws of  the
State   of  Illinois  as  to  jurisdiction,  procedures,  and
remedies, but  any  such  credit  agreement  and  remarketing
agreement  shall  otherwise by fully enforceable as valid and
binding contracts as and to the extent provided by applicable
law.
    (i)  Such credit agreement or remarketing  agreement  may
provide  for acceleration of the principal amounts due on the
bonds, provided, however, that  such  acceleration  shall  be
deferred  for  not less than 18 months from the time any such
bond is acquired pursuant to any such agreement.
(Source: P.A. 83-1536.)

    Section 99. Effective date.  This Act takes  effect  upon
becoming law.

Effective Date: 6/3/2003