SB2099ham002 101ST GENERAL ASSEMBLY

Rep. Michael J. Zalewski

Filed: 5/21/2020

 

 


 

 


 
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1
AMENDMENT TO SENATE BILL 2099

2    AMENDMENT NO. ______. Amend Senate Bill 2099 by replacing
3everything after the enacting clause with the following:
 
4    "Section 1. Short title. This Act may be cited as the
5Coronavirus Urgent Remediation Emergency Borrowing Act or the
6CURE Borrowing Act.
 
7    Section 5. Findings and purpose. The General Assembly finds
8that:
9    The State of Illinois is in the midst of both a public
10health emergency and a resultant fiscal crisis. The sudden
11worldwide outbreak of the Coronavirus Disease 2019 (COVID-19)
12and the spread of the disease in Illinois is causing dramatic
13economic upheaval and severe financial stress for individuals,
14businesses, health and other service providers, as well as the
15State and local governments across Illinois. It has resulted in
16declarations of disaster from both the Governor and the

 

 

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1President of the United States. The disaster has caused, and
2will continue to cause for some time to come, reductions in
3revenues for the State at the same time expenditures must be
4incurred to respond to the emergency. The State requires
5greater flexibility to borrow efficiently and respond
6effectively to urgent financial needs as they arise.
7    The federal government has responded to the COVID-19
8pandemic with the passage of legislation that provides
9emergency funding to state and local governments. One of the
10new funding programs, found in Section 4003 of the federal
11Coronavirus Aid, Relief, and Economic Stabilization Act (CARES
12Act) provides a Municipal Liquidity Facility administered by
13the Federal Reserve Bank with support from the United States
14Department of the Treasury, through which funds are being made
15available so that state and local governments may borrow funds
16directly from the program. The State of Illinois has the
17authority to participate in this program and any subsequent
18federal legislation allocating funds to the State to provide
19relief from the coronavirus pandemic (collectively "federal
20coronavirus relief legislation").
21    The purpose of this Act is to revise the laws authorizing
22the State to borrow money and incur state debt so that the
23State will have needed flexibility in times of emergency, can
24borrow with enhanced efficiency in urgent circumstances, and
25can effectively utilize new borrowing programs and facilities
26offered by the United States Department of the Treasury and the

 

 

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1Federal Reserve Bank, all while maintaining stringent
2standards for accountability and transparency.
 
3    Section 10. Borrowing authorized.
4    (a) Borrowing under this Section is authorized under
5subsection (b) of Section 9 of Article IX of the Illinois
6Constitution. The Governor, with the approval of the
7Comptroller and Treasurer, is authorized to borrow funds from
8the Federal Reserve Bank or its agent in accordance with the
9Municipal Liquidity Facility program established pursuant to
10Section 4003 of the federal CARES Act and Section 13(3) of the
11Federal Reserve Act, or in accordance with any other federal
12coronavirus relief legislation. The purposes for which
13borrowing is authorized include:
14        (1) to meet failures of revenue resulting from the
15    COVID-19 outbreak and to support the emergency response
16    thereto;
17        (2) to provide funds for payment or reimbursement of
18    new or increased costs of State government resulting from
19    the COVID-19 outbreak and the emergency response thereto;
20        (3) to provide funds to respond to any other disaster
21    or emergency or failure of revenues or the costs of
22    essential government services;
23        (4) to provide funds for payment or reimbursement of
24    costs of medical services provided under the Illinois
25    Public Aid Code and subject to federal reimbursement; and

 

 

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1        (5) to provide funds for payment or reimbursement of
2    costs payable from the Health Insurance Reserve Fund.
3    Proceeds of the borrowing may also be used to pay the costs
4of borrowing and the debts created by the borrowing.
5    (b) The Governor may borrow funds and contract debts from
6time to time, in principal amounts not to exceed $5,000,000,000
7outstanding at any time. Moneys thus borrowed shall be applied
8to any of the purposes described in this Section in accordance
9with properly enacted appropriations and transfers, or to pay
10the debts and associated expenses thus incurred, and to no
11other purpose. All proceeds from any borrowing under this Act,
12except those expended on the costs of issuance, shall be
13deposited into the Coronavirus Urgent Remediation Emergency
14Borrowing Fund (CURE Borrowing Fund). All moneys so borrowed
15shall be borrowed for no longer a time than the time limit set
16forth in federal program rules and guidance, and in no event
17longer than 10 years, and shall be repaid in equal principal
18payments or as required by federal program rules and guidance,
19if such requirements exist.
 
20    Section 15. Borrowing process.
21    (a) Whenever the borrowing of money under Section 10 is
22contemplated, the Director of the Governor's Office of
23Management and Budget, acting at the direction of the Governor,
24shall prepare for such borrowing in one or more series, in
25amounts, at prices and at interest rates, and in such manner as

 

 

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1directed by the Governor.
2    (b) The Director of the Governor's Office of Management and
3Budget, acting at the direction of the Governor, may negotiate
4and borrow directly from the Federal Reserve Bank or its agent
5in accordance with the Municipal Liquidity Facility program
6established pursuant to Section 4003 of the federal CARES Act
7and Section 13(3) of the Federal Reserve Act, or in accordance
8with any other federal coronavirus relief legislation.
9    (c) The rate of interest on any borrowing pursuant to this
10Act shall not exceed the maximum rate authorized by the Bond
11Authorization Act, as amended at the time of the making of the
12contract. The requirements of the Illinois Procurement Code
13requiring competitive requests for proposal shall not apply to
14the selection of a lender in accordance with this Section.
 
15    Section 20. Bonds, notes, certificates or other
16facilities; appropriation.
17    (a) There shall be prepared, under the direction of the
18Governor, the form of bonds, notes, certificates or other
19facilities that the Governor deems advisable for borrowing
20pursuant to this Act. The bonds, notes, certificates or other
21facilities, when issued, shall be signed by the Governor and a
22record of their issuance shall be kept by the Comptroller. The
23interest on and principal of the debt shall be paid from the
24General Obligation Bond Retirement and Interest Fund.
25    (b) There is appropriated on a continuing basis, out of any

 

 

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1money in the State treasury, a sum sufficient for the payment
2of the interest on and principal of any debts contracted under
3this Act, and the irrevocable and continuing authority for and
4direction to the State Treasurer and the Comptroller to make
5the necessary transfers, as directed by the Governor.
6    (c) The Governor is authorized to order, pursuant to the
7proceedings authorizing debts contracted under this Act, the
8transfer of any moneys on deposit in the State treasury into
9the General Obligation Bond Retirement and Interest Fund at
10times and in amounts the Governor deems necessary to provide
11for the payment of that interest and principal.
12    (d) The Comptroller is authorized and directed to draw
13warrants on the State Treasurer for the amount of all payments
14of principal and interest on the bonds, notes, certificates or
15other facilities issued under this Act.
 
16    Section 50. The State Finance Act is amended by adding
17Sections 5.934 and 6z-123 as follows:
 
18    (30 ILCS 105/5.934 new)
19    Sec. 5.934. The Coronavirus Urgent Remediation Emergency
20Borrowing Fund (CURE Borrowing Fund).
 
21    (30 ILCS 105/6z-123 new)
22    Sec. 6z-123. Coronavirus Urgent Remediation Emergency
23Borrowing Fund. The Coronavirus Urgent Remediation Emergency

 

 

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1Borrowing Fund (CURE Borrowing Fund) is created as a special
2fund in the State treasury for the purpose of receiving
3proceeds from borrowings transacted pursuant to the
4Coronavirus Urgent Remediation Emergency Borrowing Act (CURE
5Borrowing Act) and for transferring and expending such moneys
6for the purposes authorized by that Act.
 
7    Section 55. The Short Term Borrowing Act is amended by
8changing Sections 1, 1.1, 2, and 3 as follows:
 
9    (30 ILCS 340/1)  (from Ch. 120, par. 406)
10    Sec. 1. Cash flow borrowing. Whenever significant timing
11variations occur between disbursement and receipt of budgeted
12funds within a fiscal year, making it necessary to borrow in
13anticipation of revenues to be collected in a fiscal year, in
14order to meet the same, the Governor, Comptroller and Treasurer
15may contract debts, in an amount not exceeding 5% of the
16State's appropriations for that fiscal year, and moneys thus
17borrowed shall be applied to the purpose for which they were
18obtained, or to pay the costs of borrowing and the debts thus
19created, and to no other purpose. All moneys so borrowed shall
20be repaid by the close of the fiscal year in which borrowed.
21(Source: P.A. 88-669, eff. 11-29-94; 93-1046, eff. 10-15-04.)
 
22    (30 ILCS 340/1.1)
23    Sec. 1.1. Borrowing upon emergencies or failures in

 

 

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1revenue. Whenever emergencies or failures in revenues of the
2State occur, in order to meet deficits caused by those
3emergencies or failures, the Governor, Comptroller, and
4Treasurer may contract debts in an amount not exceeding 15% of
5the State's appropriations for that fiscal year. The moneys
6thus borrowed shall be applied to the purposes for which they
7were obtained, or to pay the costs of borrowing and the debts
8thus created by the borrowing, and to no other purpose. Before
9incurring debt under this Section, the Governor shall give
10written notice to the Clerk of the House of Representatives,
11the Secretary of the Senate, and the Secretary of State setting
12forth the reasons for the proposed borrowing and the corrective
13measures recommended to restore the State's fiscal soundness.
14The notice shall be a public record and open for inspection at
15the offices of the Secretary of State during normal business
16hours. No debt may be incurred under this Section until 7 30
17days after the notice is served. All moneys so borrowed shall
18be borrowed for no longer time than one year.
19(Source: P.A. 88-669, eff. 11-29-94; 93-1046, eff. 10-15-04.)
 
20    (30 ILCS 340/2)  (from Ch. 120, par. 407)
21    Sec. 2. Sale of certificates. For borrowing authorized
22under Sections 1 and 1.1 of this Act, certificates may be
23issued and sold from time to time, in one or more series, in
24amounts, at prices and at interest rates, all as directed by
25the Governor, Comptroller, and Treasurer. Bidders shall submit

 

 

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1sealed bids to the Director of the Governor's Office of
2Management and Budget upon such terms as shall be approved by
3the Governor, Comptroller, and Treasurer after such notice as
4shall be determined to be reasonable by the Director of the
5Governor's Office of Management and Budget. The loan shall be
6awarded to the bidder offering the lowest effective rate of
7interest not exceeding the maximum rate authorized by the Bond
8Authorization Act as amended at the time of the making of the
9contract.
10    However, for borrowing authorized under Sections 1 and 1.1
11of this Act during fiscal years 2020 and 2021 only,
12certificates may be issued and sold on a negotiated basis
13rather than by sealed bid from time to time, in one or more
14series, in amounts, at prices and at interest rates, and in
15such manner, all as directed by the Governor, Comptroller, and
16Treasurer. The rate of interest must not exceed the maximum
17rate authorized by the Bond Authorization Act as amended at the
18time of the making of the contract. The requirements of the
19Illinois Procurement Code shall not apply to the selection of
20the purchaser of any certificates sold in accordance with the
21provisions of this paragraph.
22    With respect to instruments for the payment of money issued
23under this Section either before, on, or after the effective
24date of this amendatory Act of 1989, it is and always has been
25the intention of the General Assembly (i) that the Omnibus Bond
26Acts are and always have been supplementary grants of power to

 

 

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1issue instruments in accordance with the Omnibus Bond Acts,
2regardless of any provision of this Act that may appear to be
3or to have been more restrictive than those Acts, (ii) that the
4provisions of this Section are not a limitation on the
5supplementary authority granted by the Omnibus Bond Acts, and
6(iii) that instruments issued under this Section within the
7supplementary authority granted by the Omnibus Bond Acts are
8not invalid because of any provision of this Act that may
9appear to be or to have been more restrictive than those Acts.
10(Source: P.A. 88-669, eff. 11-29-94; 93-1046, eff. 10-15-04.)
 
11    (30 ILCS 340/3)  (from Ch. 120, par. 408)
12    Sec. 3. There shall be prepared under the direction of the
13officers named in this Act such form of bonds or certificates
14as they shall deem advisable, which, when issued, shall be
15signed by the Governor, Comptroller and Treasurer, and shall be
16recorded by the Comptroller in a book to be kept by him or her
17for that purpose. The interest and principal of such
18certificates loan shall be paid by the Treasurer treasurer out
19of the General Obligation Bond Retirement and Interest Fund.
20    There is hereby appropriated out of any money in the
21Treasury a sum sufficient for the payment of the interest and
22principal of any debts contracted under this Act.
23    The Governor, Comptroller, and Treasurer are authorized to
24order pursuant to the proceedings authorizing those debts the
25transfer of any moneys on deposit in the treasury into the

 

 

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1General Obligation Bond Retirement and Interest Fund at times
2and in amounts they deem necessary to provide for the payment
3of that interest and principal.
4    The Comptroller is hereby authorized and directed to draw
5his warrant on the State Treasurer for the amount of all such
6payments.
7    The directive authorizing borrowing under Section 1 or 1.1
8of this Act shall set forth a pro forma cash flow statement
9that identifies estimated monthly receipts and expenditures
10with identification of sources for repaying the borrowed funds.
11(Source: P.A. 101-275, eff. 8-9-19.)
 
12    Section 99. Effective date. This Act takes effect upon
13becoming law.".