Full Text of HB2626 93rd General Assembly
HB2626enr 93RD GENERAL ASSEMBLY
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| AN ACT concerning bonds.
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| Be it enacted by the People of the State of Illinois, | 3 |
| represented in the General Assembly:
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| Section 5. The General Obligation Bond Act is amended by | 5 |
| changing Section 9 as follows:
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| (30 ILCS 330/9) (from Ch. 127, par. 659)
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| Sec. 9. Conditions for Issuance and Sale of Bonds - | 8 |
| Requirements for
Bonds.
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| (a) Bonds shall be issued and sold from time to time, in | 10 |
| one or
more series, in such amounts and at such prices as may | 11 |
| be directed by the
Governor, upon recommendation by the | 12 |
| Director of the
Governor's Office of Management and Budget
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| Bureau of the Budget .
Bonds shall be in such form (either | 14 |
| coupon, registered or book entry), in
such denominations, | 15 |
| payable within 30 years from their date, subject to such
terms | 16 |
| of redemption with or without premium, bear interest payable at
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| such times and at such fixed or variable rate or rates, and be | 18 |
| dated
as shall be fixed and determined by the Director of
the
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| Governor's Office of Management and Budget
Bureau of the Budget
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| in the order authorizing the issuance and sale
of any series of | 21 |
| Bonds, which order shall be approved by the Governor
and is | 22 |
| herein called a "Bond Sale Order"; provided however, that | 23 |
| interest
payable at fixed or variable rates shall not exceed | 24 |
| that permitted in the
Bond Authorization Act, as now or | 25 |
| hereafter amended. Bonds shall be
payable at such place or | 26 |
| places, within or without the State of Illinois, and
may be | 27 |
| made registrable as to either principal or as to both principal | 28 |
| and
interest, as shall be specified in the Bond Sale Order. | 29 |
| Bonds may be callable
or subject to purchase and retirement or | 30 |
| tender and remarketing as fixed
and determined in the Bond Sale | 31 |
| Order.
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| In the case of any series of Bonds bearing interest at a |
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| variable interest
rate ("Variable Rate Bonds"), in lieu of | 2 |
| determining the rate or rates at which
such series of Variable | 3 |
| Rate Bonds shall bear interest and the price or prices
at which | 4 |
| such Variable Rate Bonds shall be initially sold or remarketed | 5 |
| (in the
event of purchase and subsequent resale), the Bond Sale | 6 |
| Order may provide that
such interest rates and prices may vary | 7 |
| from time to time depending on criteria
established in such | 8 |
| Bond Sale Order, which criteria may include, without
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| limitation, references to indices or variations in interest | 10 |
| rates as may, in
the judgment of a remarketing agent, be | 11 |
| necessary to cause Variable Rate Bonds
of such series to be | 12 |
| remarketable from time to time at a price equal to their
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| principal amount, and may provide for appointment of a bank, | 14 |
| trust company,
investment bank, or other financial institution | 15 |
| to serve as remarketing agent
in that connection.
The Bond Sale | 16 |
| Order may provide that alternative interest rates or provisions
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| for establishing alternative interest rates, different | 18 |
| security or claim
priorities, or different call or amortization | 19 |
| provisions will apply during
such times as Variable Rate Bonds | 20 |
| of any series are held by a person providing
credit or | 21 |
| liquidity enhancement arrangements for such Bonds as | 22 |
| authorized in
subsection (b) of this Section.
The Bond Sale | 23 |
| Order may also provide for such variable interest rates to be
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| established pursuant to a process generally known as an auction | 25 |
| rate process
and may provide for appointment of one or more | 26 |
| financial institutions to serve
as auction agents and | 27 |
| broker-dealers in connection with the establishment of
such | 28 |
| interest rates and the sale and remarketing of such Bonds.
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| (b) In connection with the issuance of any series of Bonds, | 30 |
| the State may
enter into arrangements to provide additional | 31 |
| security and liquidity for such
Bonds, including, without | 32 |
| limitation, bond or interest rate insurance or
letters of | 33 |
| credit, lines of credit, bond purchase contracts, or other
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| arrangements whereby funds are made available to retire or | 35 |
| purchase Bonds,
thereby assuring the ability of owners of the | 36 |
| Bonds to sell or redeem their
Bonds. The State may enter into |
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| contracts and may agree to pay fees to persons
providing such | 2 |
| arrangements, but only under circumstances where the Director | 3 |
| of
the
Governor's Office of Management and Budget
Bureau of the | 4 |
| Budget certifies that he or she reasonably expects the total
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| interest paid or to be paid on the Bonds, together with the | 6 |
| fees for the
arrangements (being treated as if interest), would | 7 |
| not, taken together, cause
the Bonds to bear interest, | 8 |
| calculated to their stated maturity, at a rate in
excess of the | 9 |
| rate that the Bonds would bear in the absence of such
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| arrangements.
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| The State may, with respect to Bonds issued or anticipated | 12 |
| to be issued,
participate in and enter into arrangements with | 13 |
| respect to interest rate
protection or exchange agreements, | 14 |
| guarantees, or financial futures contracts
for the purpose of | 15 |
| limiting , reducing, or managing
or restricting interest rate | 16 |
| exposure
risk .
The authority granted under this paragraph, | 17 |
| however, shall not increase the principal amount of Bonds | 18 |
| authorized to be issued by law. The arrangements may be | 19 |
| executed and delivered by the Director
of the
Governor's Office | 20 |
| of Management and Budget
Bureau of the Budget on behalf of the | 21 |
| State. Net payments for such
arrangements shall constitute | 22 |
| interest on the Bonds and shall be paid from the
General | 23 |
| Obligation Bond Retirement and Interest Fund. The Director of | 24 |
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Governor's Office of Management and Budget
Bureau of the | 25 |
| Budget shall at least annually certify to the Governor and
the
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| State Comptroller his or her estimate of the amounts of such | 27 |
| net payments to
be included in the calculation of interest | 28 |
| required to be paid by the State.
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| (c) Prior to the issuance of any Variable Rate Bonds | 30 |
| pursuant to
subsection (a), the Director of the
Governor's | 31 |
| Office of Management and Budget
Bureau of the Budget shall | 32 |
| adopt an
interest rate risk management policy providing that | 33 |
| the amount of the State's
variable rate exposure with respect | 34 |
| to Bonds shall not exceed 20%. This policy
shall remain in | 35 |
| effect while any Bonds are outstanding and the issuance of
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| Bonds
shall be subject to the terms of such policy. The terms |
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| of this policy may be
amended from time to time by the Director | 2 |
| of the
Governor's Office of Management and Budget
Bureau of the | 3 |
| Budget but in no
event shall any amendment cause the permitted | 4 |
| level of the State's variable
rate exposure with respect to | 5 |
| Bonds to exceed 20%.
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| (Source: P.A. 92-16, eff. 6-28-01; 93-9, eff. 6-3-03; revised | 7 |
| 8-23-03.)
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| Section 99. Effective date. This Act takes effect upon | 9 |
| becoming law. |
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