Full Text of SB0041 100th General Assembly
SB0041eng 100TH GENERAL ASSEMBLY |
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| 1 | | AN ACT concerning finance.
| 2 | | Be it enacted by the People of the State of Illinois, | 3 | | represented in the General Assembly:
| 4 | | Section 5. The Illinois Municipal Code is amended by adding | 5 | | Division 13 to Article 8 as follows: | 6 | | (65 ILCS 5/Art. 8 Div. 13 heading new) | 7 | | DIVISION 13. ASSIGNMENT OF RECEIPTS | 8 | | (65 ILCS 5/8-13-5 new) | 9 | | Sec. 8-13-5. Definitions. As used in this Article: | 10 | | "Assignment agreement" means an agreement between a | 11 | | transferring unit and an issuing entity for the conveyance of | 12 | | all or part of any revenues or taxes received by the | 13 | | transferring unit from a State entity. | 14 | | "Conveyance" means an assignment, sale, transfer, or other | 15 | | conveyance. | 16 | | "Deposit account" means a designated escrow account | 17 | | established by an issuing entity at a trust company or bank | 18 | | having trust powers for the deposit of transferred receipts | 19 | | under an assignment agreement. | 20 | | "Issuing entity" means (i) a corporation, trust or other | 21 | | entity that has been established for the limited purpose of | 22 | | issuing obligations for the benefit of a transferring unit, or |
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| 1 | | (ii) a bank or trust company in its capacity as trustee for | 2 | | obligations issued by such bank or trust company for the | 3 | | benefit of a transferring unit. | 4 | | "State entity" means the State Comptroller, the State | 5 | | Treasurer, or the Illinois Department of Revenue. | 6 | | "Transferred receipts" means all or part of any revenues or | 7 | | taxes received from a State entity that have been conveyed by a | 8 | | transferring unit under an assignment agreement. | 9 | | "Transferring unit" means a home rule municipality located | 10 | | in the State. | 11 | | (65 ILCS 5/8-13-10 new) | 12 | | Sec. 8-13-10. Assignment of receipts. | 13 | | (a) Any transferring unit which receives revenues or taxes | 14 | | from a State entity may (to the extent not prohibited by any | 15 | | applicable statute, regulation, rule, or agreement governing | 16 | | the use of such revenues or taxes) authorize, by ordinance, the | 17 | | conveyance of all or any portion of such revenues or taxes to | 18 | | an issuing entity. Any conveyance of transferred receipts | 19 | | shall: (i) be made pursuant to an assignment agreement in | 20 | | exchange for the net proceeds of obligations issued by the | 21 | | issuing entity for the benefit of the transferring unit and | 22 | | shall, for all purposes, constitute an absolute conveyance of | 23 | | all right, title, and interest therein; (ii) not be deemed a | 24 | | pledge or other security interest for any borrowing by the | 25 | | transferring unit; (iii) be valid, binding, and enforceable in |
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| 1 | | accordance with the terms thereof and of any related | 2 | | instrument, agreement, or other arrangement, including any | 3 | | pledge, grant of security interest, or other encumbrance made | 4 | | by the issuing entity to secure any obligations issued by the | 5 | | issuing entity for the benefit of the transferring unit; and | 6 | | (iv) not be subject to disavowal, disaffirmance, cancellation, | 7 | | or avoidance by reason of insolvency of any party, lack of | 8 | | consideration, or any other fact, occurrence, or State law or | 9 | | rule. On and after the effective date of the conveyance of the | 10 | | transferred receipts, the transferring unit shall have no | 11 | | right, title or interest in or to the transferred receipts | 12 | | conveyed and the transferred receipts so conveyed shall be the | 13 | | property of the issuing entity to the extent necessary to pay | 14 | | the obligations issued by the issuing entity for the benefit of | 15 | | the transferring unit, and shall be received, held, and | 16 | | disbursed by the issuing entity in a trust fund outside the | 17 | | treasury of the transferring unit. An assignment agreement may | 18 | | provide for the periodic reconveyance to the transferring unit | 19 | | of amounts of transferred receipts remaining after the payment | 20 | | of the obligations issued by the issuing entity for the benefit | 21 | | of the transferring unit. | 22 | | (b) In connection with any conveyance of transferred | 23 | | receipts, the transferring unit is authorized to direct the | 24 | | applicable State entity to deposit or cause to be deposited any | 25 | | amount of such transferred receipts into a deposit account in | 26 | | order to secure the obligations issued by the issuing entity |
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| 1 | | for the benefit of the transferring unit. Where the | 2 | | transferring unit states that such direction is irrevocable, | 3 | | the direction shall be treated by the applicable State entity | 4 | | as irrevocable with respect to the transferred receipts | 5 | | described in such direction. Each State entity shall comply | 6 | | with the terms of any such direction received from a | 7 | | transferring unit and shall execute and deliver such | 8 | | acknowledgments and agreements, including escrow and similar | 9 | | agreements, as the transferring unit may require to effectuate | 10 | | the deposit of transferred receipts in accordance with the | 11 | | direction of the transferring unit. | 12 | | (c) Not later than the date of issuance by an issuing | 13 | | entity of any obligations secured by collections of transferred | 14 | | receipts, a certified copy of the ordinance authorizing the | 15 | | conveyance of the right to receive the transferred receipts, | 16 | | together with executed copies of the applicable assignment | 17 | | agreement and the agreement providing for the establishment of | 18 | | the deposit account, shall be filed with the State entity | 19 | | having custody of the transferred receipts. | 20 | | (65 ILCS 5/8-13-15 new) | 21 | | Sec. 8-13-15. Pledges and agreements of the State. The | 22 | | State of Illinois pledges to and agrees with each transferring | 23 | | unit and issuing entity that the State will not limit or alter | 24 | | the rights and powers vested in the State entities by this | 25 | | Article with respect to the disposition of transferred receipts |
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| 1 | | so as to impair the terms of any contract, including any | 2 | | assignment agreement, made by the transferring unit with the | 3 | | issuing entity or any contract executed by the issuing entity | 4 | | in connection with the issuance of obligations by the issuing | 5 | | entity for the benefit of the transferring unit until all | 6 | | requirements with respect to the deposit by such State entity | 7 | | of transferred receipts for the benefit of such issuing entity | 8 | | have been fully met and discharged. In addition, the State | 9 | | pledges to and agrees with each transferring unit and each | 10 | | issuing entity that the State will not limit or alter the basis | 11 | | on which transferred receipts are to be paid to the issuing | 12 | | entity as provided in this Article, or the use of such funds, | 13 | | so as to impair the terms of any such contract. Each | 14 | | transferring unit and issuing entity is authorized to include | 15 | | these pledges and agreements of the State in any contract | 16 | | executed and delivered as described in this Article. In no way | 17 | | shall the pledge and agreements of the State be interpreted to | 18 | | construe the State as a guarantor of any debt or obligation | 19 | | subject to an assignment agreement under this Division. | 20 | | (65 ILCS 5/8-13-20 new) | 21 | | Sec. 8-13-20. Home rule. A home rule unit may not enter | 22 | | into assignment agreements in a manner inconsistent with the | 23 | | provisions of this Article. This Section is a limitation under | 24 | | subsection (i) of Section 6 of
Article VII of the Illinois | 25 | | Constitution on the concurrent exercise by home rule units of
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| 1 | | powers and functions exercised by the State.
| 2 | | Section 99. Effective date. This Act takes effect upon | 3 | | becoming law. |
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