Full Text of HB2626 93rd General Assembly
HB2626sam001 93RD GENERAL ASSEMBLY
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Sen. Don Harmon
Filed: 3/3/2004
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| AMENDMENT TO HOUSE BILL 2626
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| AMENDMENT NO. ______. Amend House Bill 2661 by replacing | 3 |
| everything after the enacting clause with the following:
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| "Section 1. Short title. This Act may be cited as the Bond | 5 |
| Issuance Expense Limitation Act. | 6 |
| Section 5. Definitions. For the purposes of this Act: | 7 |
| "Bond" or "bonds" means any general obligation bond, | 8 |
| revenue bond, alternate bond, refunding or advance refunding | 9 |
| bond, or other bond, note, or evidence of borrowing or | 10 |
| indebtedness issued by a public issuer. | 11 |
| "Bond issuance expenses" means the fees and charges payable | 12 |
| by the issuer, either directly or out of the bond proceeds, for | 13 |
| the issuance and sale of bonds. The term does not, however, | 14 |
| include the costs of bond insurance, capitalized interest, | 15 |
| credit or liquidity enhancements, interest rate swaps or | 16 |
| guarantees, or financial futures contracts. | 17 |
| "Public issuer" means the State or any of its agencies or | 18 |
| instrumentalities. | 19 |
| Section 10. Applicability. This Act applies to all bonds | 20 |
| issued by or through a public issuer pursuant to an authorizing | 21 |
| resolution or contract for issuance adopted or entered into | 22 |
| after the effective date of this Act, regardless of the | 23 |
| statute, Omnibus Bond Act, or other source of authority under |
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| which the issuance of those bonds is authorized. This Act does | 2 |
| not apply to bonds issued by a public issuer pursuant to an | 3 |
| authorizing resolution or contract for issuance adopted or | 4 |
| entered into on or before the effective date of this Act. | 5 |
| Section 15. Bond issuance expense limitations. | 6 |
| (a) Except as provided in subsection (b), bond issuance | 7 |
| expenses shall not exceed 0.5% of the principal amount of the | 8 |
| proceeds realized from the sale of the bonds. | 9 |
| (b) Bond issuance expenses for refunding and advance | 10 |
| refunding bonds shall not exceed 0.3% of the principal amount | 11 |
| of the proceeds realized from the sale of the refunding or | 12 |
| advance refunding bonds. | 13 |
| Section 20. Refunding bonds; net present value savings. A | 14 |
| public issurer may not issue refunding or advance refunding | 15 |
| bonds unless, before issuing the bonds, the public issurer | 16 |
| files with the Governor and the General Assembly a written | 17 |
| certification demonstrating that the issuance will result in a | 18 |
| net present value savings of at least 3%. | 19 |
| Section 25. Violation. | 20 |
| (a) The issuance of bonds or payment of bond issuance | 21 |
| expenses in violation of this Act does not invalidate the | 22 |
| bonds. | 23 |
| (b) The amount of any bond issuance expenses paid in excess | 24 |
| of the limitation imposed by Section 15 of this Act may be | 25 |
| recovered from the payee in an action brought by the public | 26 |
| issuer or the Illinois Attorney General. In addition, a payee | 27 |
| who knowingly accepts payment of bond issuance expenses in | 28 |
| violation of this Act shall be liable to the State for a civil | 29 |
| penalty of 3 times the amount in violation or $100,000, | 30 |
| whichever is greater. | 31 |
| (c) Excess payments and penalties recovered under this |
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| Section by the State or any of its agencies or | 2 |
| instrumentalities or by the Attorney General shall be deposited | 3 |
| into the General Revenue Fund. | 4 |
| Section 30. Competitive procurement. A public issuer | 5 |
| issuing bonds to which this Act applies must employ authorized | 6 |
| competitive procedures. Negotiated sale may be used only if (i) | 7 |
| it is permitted by the law authorizing issuance of the bonds | 8 |
| and (ii) it is preceded by a competitive request for proposal | 9 |
| procedure substantially similar to that required to be followed | 10 |
| by the State in the issuance of General Obligation Bonds under | 11 |
| Section 11 of the General Obligation Bond Act and the Illinois | 12 |
| Procurement Code. | 13 |
| Section 35. Guidance. The Governor's Office of Management | 14 |
| and Budget shall, upon request, provide guidance to any | 15 |
| potential public issuer on conforming its bond sale to the | 16 |
| requirements of this Act. | 17 |
| Section 90. The Statute on Statutes is amended by changing | 18 |
| Section 8 as follows:
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| (5 ILCS 70/8) (from Ch. 1, par. 1107)
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| Sec. 8. Omnibus Bond Acts.
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| (a) A citation to the Omnibus Bond Acts is a citation to | 22 |
| all of the
following Acts, collectively, as amended from time | 23 |
| to time: the Bond
Authorization Act, the Registered Bond Act, | 24 |
| the Municipal Bond Reform Act,
the Local Government Debt Reform | 25 |
| Act, subsection (a) of Section 1-7 of the
Property Tax | 26 |
| Extension Limitation Act,
subsection (a) of Section 18-190 of | 27 |
| the Property Tax Code,
the Uniform Facsimile Signature of | 28 |
| Public Officials Act, the Local Government
Bond Validity Act, | 29 |
| the Illinois Finance Authority Act, the Public Funds
Investment | 30 |
| Act, the Local
Government Credit Enhancement Act, the Local |
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| Government Defeasance of Debt
Law, the Intergovernmental | 2 |
| Cooperation Act, the Local
Government Financial Planning and | 3 |
| Supervision Act, the Special Assessment
Supplemental Bond and | 4 |
| Procedure Act, Section 12-5 of the Election Code, and
any | 5 |
| similar Act granting additional
omnibus bond
powers to | 6 |
| governmental entities generally, whether enacted before, on, | 7 |
| or
after the effective date of this amendatory Act of 1989.
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| (b) The General Assembly recognizes that the proliferation | 9 |
| of governmental
entities has resulted in the enactment of | 10 |
| hundreds of statutory provisions
relating to the borrowing and | 11 |
| other powers of governmental entities. The
General Assembly | 12 |
| addresses and has addressed problems common to all such
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| governmental entities so that they have equal access to the | 14 |
| municipal bond
market. It has been, and will continue to be, | 15 |
| the intention of the General
Assembly to enact legislation | 16 |
| applicable to governmental entities in an
omnibus fashion, as | 17 |
| has been done in the provisions of the Omnibus Bond Acts.
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| (c) It is and always has been the intention of the General | 19 |
| Assembly that
the Omnibus Bond Acts are and always have been | 20 |
| supplementary grants of
power, cumulative in nature and in | 21 |
| addition to any power or authority
granted in any other laws of | 22 |
| the State. The Omnibus Bond Acts are
supplementary grants of | 23 |
| power when applied in connection with any similar
grant of | 24 |
| power or limitation contained in any other law of the State,
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| whether or not the other law is enacted or amended after an | 26 |
| Omnibus Bond
Act or appears to be more restrictive than an | 27 |
| Omnibus Bond Act, unless the
General Assembly expressly | 28 |
| declares in such other law that a specifically
named Omnibus | 29 |
| Bond Act does not apply.
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| (c-5) Notwithstanding the other provisions of this Section | 31 |
| and of any other law, bonds issued after the effective date of | 32 |
| this amendatory Act of the 93rd General Assembly under the | 33 |
| authority of any of the Omnibus Bond Acts are subject to the | 34 |
| requirements of the Bond Issuance Expense Limitation Act.
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| (d) All instruments providing for the payment of money | 2 |
| executed
by or on behalf of any governmental entity organized | 3 |
| by or under
the laws of this State, including without | 4 |
| limitation the State, to carry
out a public governmental or | 5 |
| proprietary function, acting through its
corporate | 6 |
| authorities, or which any governmental entity has assumed or
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| agreed to pay, which were:
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| (1) issued or authorized to be issued by proceedings | 9 |
| adopted by such
corporate authorities before the effective | 10 |
| date of this amendatory Act of 1989;
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| (2) issued or authorized to be issued in accordance | 12 |
| with the procedures
set forth in or pursuant to any | 13 |
| authorization contained in any of the
Omnibus Bond Acts; | 14 |
| and
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| (3) issued or authorized to be issued for any purpose | 16 |
| authorized by the
laws of this State,
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| are valid and legally binding obligations of the governmental | 18 |
| entity
issuing such instruments, payable in accordance with | 19 |
| their terms.
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| (Source: P.A. 93-205, eff. 1-1-04.)
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| Section 92. The Illinois Finance Authority Act is amended | 22 |
| by adding Section 801-50 as follows: | 23 |
| (20 ILCS 3501/801-50 new) | 24 |
| Sec. 801-50. Bond Issuance Expense Limitation Act.
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| Notwithstanding any other provision of law, the issuance of | 26 |
| bonds under this Act is subject to the requirements of the Bond | 27 |
| Issuance Expense Limitation Act.
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| Section 94. The General Obligation Bond Act is amended by | 29 |
| changing Sections 8, 9, and 16 as follows:
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| (30 ILCS 330/8) (from Ch. 127, par. 658)
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| Sec. 8. Bond sale expenses; capitalized interest.
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| (a) Except as provided in subsection (a-5), an amount not | 3 |
| to exceed 0.5 percent of the
principal amount of the proceeds | 4 |
| of sale of each bond sale is authorized
to be used to pay the | 5 |
| reasonable costs of issuance and sale of State of
Illinois | 6 |
| general obligation bonds authorized and sold pursuant to this | 7 |
| Act.
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| (a-5) An amount not to exceed 0.3 percent of the
principal | 9 |
| amount of the proceeds of sale of each sale of refunding or | 10 |
| advance refunding bonds is authorized
to be used to pay the | 11 |
| reasonable costs of issuance and sale of State of
Illinois | 12 |
| general obligation bonds authorized and sold pursuant to this | 13 |
| Act. | 14 |
| (a-10) Notwithstanding any other provision of law, the | 15 |
| issuance of bonds under this Act is subject to the requirements | 16 |
| of the Bond Issuance Expense Limitation Act.
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| (b) The Bond Sale Order may provide for a portion of the | 18 |
| proceeds of
the bond sale, representing up to 12 months' | 19 |
| interest on the bonds, to be
deposited directly into the | 20 |
| capitalized interest account of the General
Obligation Bond | 21 |
| Retirement and Interest Fund.
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| (Source: P.A. 93-2, eff. 4-7-03.)
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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 - | 25 |
| Requirements for
Bonds.
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| (a) Bonds shall be issued and sold from time to time, in | 27 |
| one or
more series, in such amounts and at such prices as may | 28 |
| be directed by the
Governor, upon recommendation by the | 29 |
| 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 | 31 |
| coupon, registered or book entry), in
such denominations, | 32 |
| payable within 30 years from their date, subject to such
terms | 33 |
| 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 | 2 |
| 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 | 5 |
| Bonds, which order shall be approved by the Governor
and is | 6 |
| herein called a "Bond Sale Order"; provided however, that | 7 |
| interest
payable at fixed or variable rates shall not exceed | 8 |
| that permitted in the
Bond Authorization Act, as now or | 9 |
| hereafter amended. Bonds shall be
payable at such place or | 10 |
| places, within or without the State of Illinois, and
may be | 11 |
| made registrable as to either principal or as to both principal | 12 |
| and
interest, as shall be specified in the Bond Sale Order. | 13 |
| Bonds may be callable
or subject to purchase and retirement or | 14 |
| tender and remarketing as fixed
and determined in the Bond Sale | 15 |
| Order.
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| In the case of any series of Bonds bearing interest at a | 17 |
| variable interest
rate ("Variable Rate Bonds"), in lieu of | 18 |
| determining the rate or rates at which
such series of Variable | 19 |
| Rate Bonds shall bear interest and the price or prices
at which | 20 |
| such Variable Rate Bonds shall be initially sold or remarketed | 21 |
| (in the
event of purchase and subsequent resale), the Bond Sale | 22 |
| Order may provide that
such interest rates and prices may vary | 23 |
| from time to time depending on criteria
established in such | 24 |
| Bond Sale Order, which criteria may include, without
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| limitation, references to indices or variations in interest | 26 |
| rates as may, in
the judgment of a remarketing agent, be | 27 |
| necessary to cause Variable Rate Bonds
of such series to be | 28 |
| 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, | 30 |
| trust company,
investment bank, or other financial institution | 31 |
| to serve as remarketing agent
in that connection.
The Bond Sale | 32 |
| Order may provide that alternative interest rates or provisions
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| for establishing alternative interest rates, different | 34 |
| security or claim
priorities, or different call or amortization |
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| provisions will apply during
such times as Variable Rate Bonds | 2 |
| of any series are held by a person providing
credit or | 3 |
| liquidity enhancement arrangements for such Bonds as | 4 |
| authorized in
subsection (b) of this Section.
The Bond Sale | 5 |
| 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 | 7 |
| rate process
and may provide for appointment of one or more | 8 |
| financial institutions to serve
as auction agents and | 9 |
| broker-dealers in connection with the establishment of
such | 10 |
| 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, | 12 |
| the State may
enter into arrangements to provide additional | 13 |
| security and liquidity for such
Bonds, including, without | 14 |
| limitation, bond or interest rate insurance or
letters of | 15 |
| credit, lines of credit, bond purchase contracts, or other
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| arrangements whereby funds are made available to retire or | 17 |
| purchase Bonds,
thereby assuring the ability of owners of the | 18 |
| Bonds to sell or redeem their
Bonds. The State may enter into | 19 |
| contracts and may agree to pay fees to persons
providing such | 20 |
| arrangements, but only under circumstances where the Director | 21 |
| of
the
Governor's Office of Management and Budget
Bureau of the | 22 |
| 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 | 24 |
| fees for the
arrangements (being treated as if interest), would | 25 |
| not, taken together, cause
the Bonds to bear interest, | 26 |
| calculated to their stated maturity, at a rate in
excess of the | 27 |
| 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 | 30 |
| to be issued,
participate in and enter into arrangements with | 31 |
| respect to interest rate
protection or exchange agreements, | 32 |
| guarantees, or financial futures contracts
for the purpose of | 33 |
| limiting , reducing, or managing
or restricting interest rate | 34 |
| exposure
risk .
The authority granted under this paragraph, |
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| however, shall not increase the principal amount of Bonds | 2 |
| authorized to be issued by law. The arrangements may be | 3 |
| executed and delivered by the Director
of the
Governor's Office | 4 |
| of Management and Budget
Bureau of the Budget on behalf of the | 5 |
| State. Net payments for such
arrangements shall constitute | 6 |
| interest on the Bonds and shall be paid from the
General | 7 |
| Obligation Bond Retirement and Interest Fund. The Director of | 8 |
| the
Governor's Office of Management and Budget
Bureau of the | 9 |
| 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 | 11 |
| net payments to
be included in the calculation of interest | 12 |
| required to be paid by the State.
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| (c) Prior to the issuance of any Variable Rate Bonds | 14 |
| pursuant to
subsection (a), the Director of the
Governor's | 15 |
| Office of Management and Budget
Bureau of the Budget shall | 16 |
| adopt an
interest rate risk management policy providing that | 17 |
| the amount of the State's
variable rate exposure with respect | 18 |
| to Bonds shall not exceed 20%. This policy
shall remain in | 19 |
| 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 | 21 |
| of this policy may be
amended from time to time by the Director | 22 |
| of the
Governor's Office of Management and Budget
Bureau of the | 23 |
| Budget but in no
event shall any amendment cause the permitted | 24 |
| level of the State's variable
rate exposure with respect to | 25 |
| Bonds to exceed 20%.
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| (Source: P.A. 92-16, eff. 6-28-01; 93-9, eff. 6-3-03; revised | 27 |
| 8-23-03.)
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| (30 ILCS 330/16) (from Ch. 127, par. 666)
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| Sec. 16. Refunding Bonds. The State of Illinois is | 30 |
| authorized to issue,
sell, and provide for the retirement of | 31 |
| General Obligation Bonds of the State
of Illinois in the amount | 32 |
| of $2,839,025,000, at any time and
from time to time | 33 |
| outstanding, for the purpose of refunding
any State of Illinois |
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| general obligation Bonds then outstanding, including
the | 2 |
| payment of any redemption premium thereon, any reasonable | 3 |
| expenses of
such refunding (subject to the requirements of the | 4 |
| Bond Expense Limitation Act) , any interest accrued or to accrue | 5 |
| to the earliest
or any subsequent date of redemption or | 6 |
| maturity of such outstanding
Bonds and any interest to accrue | 7 |
| to the first interest payment on the
refunding Bonds; provided | 8 |
| that such refunding Bonds shall mature no later
than the final | 9 |
| maturity date of Bonds being refunded.
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| Refunding Bonds may be sold from time to time pursuant to | 11 |
| notice of sale
and public bid or by negotiated sale in such | 12 |
| amounts and at such times, as
directed by the Governor, upon | 13 |
| recommendation by the Director of the
Governor's Office of | 14 |
| Management and Budget
Bureau
of the Budget . The Governor shall | 15 |
| notify the State Treasurer and
Comptroller of such refunding. | 16 |
| The proceeds received from the sale
of refunding Bonds shall be | 17 |
| used for the retirement at maturity or
redemption of such | 18 |
| outstanding Bonds on any maturity or redemption date
and, | 19 |
| pending such use, shall be placed in escrow, subject to such | 20 |
| terms and
conditions as shall be provided for in the Bond Sale | 21 |
| Order relating to the
Refunding Bonds. Proceeds not needed for | 22 |
| deposit in an escrow account shall
be deposited in the General | 23 |
| Obligation Bond Retirement and Interest Fund.
This Act shall | 24 |
| constitute an irrevocable and continuing appropriation of all
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| amounts necessary to establish an escrow account for the | 26 |
| purpose of refunding
outstanding general obligation Bonds and | 27 |
| to pay the reasonable expenses of such
refunding and of the | 28 |
| issuance and sale of the refunding Bonds. Any such
escrowed | 29 |
| proceeds may be invested and reinvested
in direct obligations | 30 |
| of the United States of America, maturing at such
time or times | 31 |
| as shall be appropriate to assure the
prompt payment, when due, | 32 |
| of the principal of and interest and redemption
premium, if | 33 |
| any,
on the refunded Bonds. After the terms of the escrow have | 34 |
| been fully
satisfied, any remaining balance of such proceeds |
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| and interest, income and
profits earned or realized on the | 2 |
| investments thereof shall be paid into
the General Revenue | 3 |
| Fund. The liability of the State upon the Bonds shall
continue, | 4 |
| provided that the holders thereof shall thereafter be entitled | 5 |
| to
payment only out of the moneys deposited in the escrow | 6 |
| account.
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| Except as otherwise herein provided in this Section, such | 8 |
| refunding Bonds
shall in all other respects be subject to the | 9 |
| terms and conditions of this Act.
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| (Source: P.A. 91-39, eff. 6-15-99; 91-53, eff. 6-30-99; 91-710, | 11 |
| eff.
5-17-00; revised 8-23-03.)
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| Section 98. The Build Illinois Bond Act is amended by | 13 |
| changing Section 5 as follows:
| 14 |
| (30 ILCS 425/5) (from Ch. 127, par. 2805)
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| Sec. 5. Bond Sale Expenses. An amount necessary to pay the
| 16 |
| reasonable costs of each issuance and sale of Bonds authorized | 17 |
| and sold
pursuant to this Act, including advertising, printing, | 18 |
| bond rating, travel,
security, delivery, legal and financial | 19 |
| advisory services, insurance, initial fees
of trustees, | 20 |
| registrars, paying agents and other fiduciaries, initial costs
| 21 |
| of credit or liquidity enhancement arrangements, initial fees | 22 |
| of indexing
and remarketing agents, and initial costs of | 23 |
| interest rate swaps,
guarantees or arrangements to limit | 24 |
| interest rate risk, as determined in
the related Bond Sale | 25 |
| Order,
is hereby authorized to be paid from the proceeds of | 26 |
| each Bond sale.
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| Notwithstanding any other provision of law, the issuance of | 28 |
| bonds under this Act is subject to the requirements of the Bond | 29 |
| Issuance Expense Limitation Act.
| 30 |
| (Source: P.A. 84-111.)
| 31 |
| Section 99. Effective date. This Act takes effect upon |
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| becoming law.".
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