Illinois General Assembly - Full Text of SB3311
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Full Text of SB3311  98th General Assembly




State of Illinois
2013 and 2014


Introduced 2/14/2014, by Sen. Jennifer Bertino-Tarrant


30 ILCS 350/17  from Ch. 17, par. 6917

    Amends the Local Government Debt Reform Act. In provisions concerning leases and installment contracts, provides for an exception to the prohibition on indebtedness not exceeding the debt limits provided by applicable law if the indebtedness is incurred by a school district or regional office of education to purchase or lease equipment. Effective July 1, 2014.

LRB098 19902 NHT 55121 b






SB3311LRB098 19902 NHT 55121 b

1    AN ACT concerning education.
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 17 as follows:
6    (30 ILCS 350/17)  (from Ch. 17, par. 6917)
7    Sec. 17. Leases and installment contracts.
8    (a) Interest not debt; debt on leases and installment
9contracts. Interest on bonds shall not be included in any
10computation of indebtedness of a governmental unit for the
11purpose of any statutory provision or limitation. For bonds
12consisting of leases and installment or financing contracts,
13(1) that portion of payments made by a governmental unit under
14the terms of a bond designated as interest in the bond or the
15ordinance authorizing such bond shall be treated as interest
16for purposes of this Section (2) where portions of payments due
17under the terms of a bond have not been designated as interest
18in the bond or the ordinance authorizing such bond, and all or
19a portion of such payments is to be used for the payment of
20principal of and interest on other bonds of the governmental
21unit or bonds issued by another unit of local government, such
22as a public building commission, the payments equal to interest
23due on such corresponding bonds shall be treated as interest



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1for purposes of this Section and (3) where portions of payments
2due under the terms of a bond have not been designated as
3interest in the bond or ordinance authorizing such bond and no
4portion of any such payment is to be used for the payment of
5principal of and interest on other bonds of the governmental
6unit or another unit of local government, a portion of each
7payment due under the terms of such bond shall be treated as
8interest for purposes of this Section; such portion shall be
9equal in amount to the interest that would have been paid on a
10notional obligation of the governmental unit (bearing interest
11at the highest rate permitted by law for bonds of the
12governmental unit at the time the bond was issued or, if no
13such limit existed, 12%) on which the payments of principal and
14interest were due at the same times and in the same amounts as
15payments are due under the terms of the bonds. The rule set
16forth in this Section shall be applicable to all interest no
17matter when earned or accrued or at what interval paid, and
18whether or not a bond bears interest which compounds at certain
19intervals. For purposes of bonds sold at amounts less than 95%
20of their stated value at maturity, interest for purposes of
21this Section includes the difference between the amount set
22forth on the face of the bond as the original principal amount
23and the bond's stated value at maturity.
24    This subsection may be made applicable to bonds issued
25prior to the effective date of this Act by passage of an
26ordinance to such effect by the governing body of a



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1governmental unit.
2    (b) Purchase or lease of property. The governing body of
3each governmental unit may purchase or lease either real or
4personal property, including investments, investment
5agreements, or investment services, through agreements that
6provide that the consideration for the purchase or lease may be
7paid through installments made at stated intervals for a period
8of no more than 20 years or another period of time authorized
9by law, whichever is greater; provided, however, that
10investments, investment agreements, or investment services
11purchased in connection with a bond issue may be paid through
12installments made at stated intervals for a period of time not
13in excess of the maximum term of such bond issue. Each
14governmental unit may issue certificates evidencing the
15indebtedness incurred under the lease or agreement. The
16governing body may provide for the treasurer, comptroller,
17finance officer, or other officer of the governing body charged
18with financial administration to act as counter-party to any
19such lease or agreement, as nominee lessor or seller. When the
20lease or agreement is executed by the officer of the
21governmental unit authorized by the governing body to bind the
22governmental unit thereon by the execution thereof and is filed
23with and executed by the nominee lessor or seller, the lease or
24agreement shall be sufficiently executed so as to permit the
25governmental unit to issue certificates evidencing the
26indebtedness incurred under the lease or agreement. The



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1certificates shall be valid whether or not an appropriation
2with respect thereto is included in any annual or supplemental
3budget adopted by the governmental unit. From time to time, as
4the governing body executes contracts for the purpose of
5acquiring and constructing the services or real or personal
6property that is a part of the subject of the lease or
7agreement, including financial, legal, architectural, and
8engineering services related to the lease or agreement, the
9governing body shall order the contracts filed with its nominee
10officer, and that officer shall identify the contracts to the
11lease or agreement; that identification shall permit the
12payment of the contract from the proceeds of the certificates;
13and the nominee officer shall duly apply or cause to be applied
14proceeds of the certificates to the payment of the contracts.
15The governing body of each governmental unit may sell, lease,
16convey, and reacquire either real or personal property, or any
17interest in real or personal property, upon any terms and
18conditions and in any manner, as the governing body shall
19determine, if the governmental unit will lease, acquire by
20purchase agreement, or otherwise reacquire the property, as
21authorized by this subsection or any other applicable law.
22    All indebtedness incurred under this subsection, when
23aggregated with the existing indebtedness of the governmental
24unit, may not exceed the debt limits provided by applicable
25law, unless the indebtedness is incurred by a school district
26or regional office of education to purchase or lease equipment.



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1(Source: P.A. 91-493, eff. 8-13-99; 91-868, eff. 6-22-00;
292-879, eff. 1-13-03.)
3    Section 99. Effective date. This Act takes effect July 1,