Full Text of HB1051 95th General Assembly
HB1051 95TH GENERAL ASSEMBLY
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95TH GENERAL ASSEMBLY
State of Illinois
2007 and 2008 HB1051
Introduced 2/8/2007, by Rep. Annazette Collins SYNOPSIS AS INTRODUCED: |
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New Act |
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30 ILCS 105/5.675 new |
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30 ILCS 105/5.676 new |
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30 ILCS 105/5.677 new |
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30 ILCS 105/5.678 new |
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30 ILCS 105/5.679 new |
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105 ILCS 5/34A-501 |
from Ch. 122, par. 34A-501 |
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Creates the School District Income Tax Act. Authorizes a school district
located within a municipality with 1,000,000 or more inhabitants to impose an
income tax of 0.9% on individuals and 1.44% for a period of 2 years. Requires
the Department of Revenue to collect the tax and enforce the Act. Provides that
67% of the taxes collected shall be used for educational purposes, 26.4% shall
be
used for property tax relief, 3.2% shall be used for health and safety
programs,
3.2% shall be given to the municipality in which the school district is located
to be used in the discretion of the municipality, and 0.2% may be retained by
the
Department for administrative expenses. Amends the State Finance Act to create
the various funds from which distributions of the tax money shall be made.
Amends the School Code to authorize the School Finance Authority to issue and
additional $200,000,000 in bonds for educational purposes. Effective
immediately.
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A BILL FOR
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HB1051 |
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| AN ACT concerning revenue.
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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 1. Short title. This Act may be cited as the | 5 |
| School District Income
Tax Act.
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| Section 5. Definitions. In this Act:
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| "Net income" means the net income of the taxpayer as | 8 |
| defined and as
determined and computed for the taxable year | 9 |
| under the provisions of the
Illinois Income Tax Act.
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| "Taxable year" means the calendar year, or the fiscal year | 11 |
| ending
in such calendar year, upon the basis of which taxable | 12 |
| income is computed
under this Act, and also includes a | 13 |
| fractional part of a year for which
income is earned.
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| "Resident" means: An individual or corporation who is in | 15 |
| the school district
for other than a
temporary transitory | 16 |
| purpose during the taxable year, or who is domiciled
in that | 17 |
| school district but is absent therefrom for a temporary or
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| transitory purpose during the taxable year.
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| Section 10. Imposition of tax; limitations.
For the period | 20 |
| beginning January 1, 2008, and ending December 31, 2010,
the | 21 |
| school
board of each school district located within a | 22 |
| municipality with 1,000,000 or
more inhabitants may by proper |
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| resolution
impose a tax measured by net income on every | 2 |
| individual and corporation
residing or located within the | 3 |
| boundaries of the school district for each
taxable year ending | 4 |
| on or after January 1, 2008, at a rate not to exceed 0.9%
for
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| individuals and 1.44% for corporations. The school district | 6 |
| which levies a tax
authorized by this Section shall transmit to | 7 |
| the Department of Revenue a
certified copy of the ordinance or | 8 |
| resolution imposing such tax whereupon the
Department of | 9 |
| Revenue shall proceed to administer and enforce this Section on
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| behalf of the school district as of the effective date of the | 11 |
| resolution. Upon
a change in rate of a tax levied hereunder, or | 12 |
| upon the discontinuance of the
tax, the school district shall | 13 |
| transmit to the Department
of Revenue the verified results of a | 14 |
| referendum effecting such change or
discontinuance.
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| Section 15. Referenda. The school board of a school | 16 |
| district
that has imposed a tax under Section 10 may by | 17 |
| resolution, or shall upon the
petition of 5% of the
voters who | 18 |
| voted in the school district in the last
gubernatorial | 19 |
| election, cause
to be submitted to the voters of that district
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| at an
election in accordance with the general election law a | 21 |
| proposition:
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| (i) to decrease the annual rate for the school district
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| income tax imposed under Section 10,
or
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| (ii) to repeal that school district income tax.
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| The election called
for such purposes shall be governed by |
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| the general election law. If a
majority of the votes cast on | 2 |
| the proposition to decrease the rate
of the school district | 3 |
| income tax
is in favor thereof, the school board
shall | 4 |
| thereafter, until such authority is revoked in like manner,
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| impose the annual tax as authorized; and if a majority of the | 6 |
| votes cast on
the proposition to repeal the local income tax | 7 |
| for schools is in favor
thereof, that tax shall not thereafter | 8 |
| be imposed unless again authorized
as provided in this Act.
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| Section 20. Collection.
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| (a) Any
tax imposed under this Act shall be collected by | 11 |
| and paid to the
Department of Revenue at the same time and in | 12 |
| the same manner, with the
same withholding and estimated | 13 |
| payment requirements and subject
to the same assessment and | 14 |
| refund procedures, penalties,
and interest as the tax imposed | 15 |
| by the Illinois Income Tax Act.
Except as provided in | 16 |
| subsection (b) of this Section, the
Department of Revenue shall | 17 |
| forthwith pay over to the State Treasurer, ex
officio,
as | 18 |
| trustee, all moneys received by it under this Section to be | 19 |
| deposited in
a special accounts which the State Treasurer and | 20 |
| State Comptroller shall
establish and maintain as provided in | 21 |
| Section 25.
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| (b) The School District Income Tax Refund Fund is hereby | 23 |
| created in the
State Treasury. The Department of Revenue shall | 24 |
| deposit a percentage of
the amounts collected from the tax | 25 |
| imposed under this Act by any school
district into a special |
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| account that the State Treasurer and State
Comptroller shall | 2 |
| establish and maintain within the School District Income Tax
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| Refund Fund for the purpose of paying refunds resulting from | 4 |
| overpayment of
tax liability under this Act with respect to | 5 |
| that school district. The
Department of Revenue shall determine | 6 |
| the percentage of the amounts
collected from the tax imposed | 7 |
| under this Act by any school district that is
to be deposited | 8 |
| into the special account maintained in the School District
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| Income Tax Refund Fund to pay refunds resulting from | 10 |
| overpayment of tax
liability under this Act with respect to | 11 |
| that school district and shall
certify that percentage to the | 12 |
| Comptroller, all in accordance with rules
adopted by the | 13 |
| Department of Revenue for purposes of this Section. Money
in | 14 |
| the special account maintained in the School District Income | 15 |
| Tax Refund
Fund with respect to any school district shall be | 16 |
| expended exclusively for
the purpose of paying refunds | 17 |
| resulting from overpayment of tax liability
with respect to | 18 |
| that school district under this Act. The Director of Revenue | 19 |
| shall order payment of refunds resulting from
overpayment of | 20 |
| tax liability under this Act from the special account
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| maintained with respect to a school district in the School | 22 |
| District Income Tax
Refund Fund only to the extent that amounts | 23 |
| collected pursuant to this Act
for that school district have | 24 |
| been deposited to and retained in that
special account. This | 25 |
| Section shall constitute an irrevocable and
continuing | 26 |
| appropriation from the School District Income Tax Refund Fund |
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| and
the special accounts established and maintained therein for | 2 |
| the purpose of
paying refunds upon the order of the Director of | 3 |
| the Department of Revenue
in accordance with the provisions of | 4 |
| this Section.
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| (c) The Department of Revenue shall promulgate such rules | 6 |
| and
regulations as may be necessary
to implement the provisions | 7 |
| of this Act.
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| Section 25. Proceeds from school district income tax; | 9 |
| distribution. The
Department of Revenue shall immediately pay | 10 |
| over to the State Treasurer, ex
officio, as trustee, all moneys | 11 |
| collected under this Act to be deposited into
the following | 12 |
| funds and distributed as follows:
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| (1) 67% of all moneys collected under this Act shall be | 14 |
| deposited into the
School District Income Tax Educational | 15 |
| Assistance Fund, which is created in the
State treasury. On | 16 |
| or before the 25th day of each calendar month, the
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| Department of Revenue shall prepare and certify to the | 18 |
| Comptroller the
disbursement of stated sums of money to | 19 |
| named school districts, the school
districts to be those | 20 |
| from which the Department has collected taxes under this
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| Act during the second preceding calendar month. The amount | 22 |
| to be paid to each
school district shall be the amount | 23 |
| collected from that school district during
the second | 24 |
| preceding calendar month and deposited into the School | 25 |
| District
Income Tax Educational Assistance Fund. Moneys |
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| distributed to a school
district from the School District | 2 |
| Income Tax Education Assistance Fund shall be
used, subject | 3 |
| to the approval of the
School Finance Authority, solely for | 4 |
| instructional purposes.
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| (2) 26.4% of all moneys collected under this Act shall | 6 |
| be deposited into
the
Property Tax Relief Fund, which is | 7 |
| created in the
State treasury. On or before March 1 of each | 8 |
| year, the
Department of Revenue shall prepare and certify | 9 |
| to the Comptroller the
disbursement of stated sums of money | 10 |
| to
persons who qualify for the general homestead exemption | 11 |
| or the alternative general homestead exemption under | 12 |
| Sections 15-175 and 15-176 of the Property Tax Code who | 13 |
| reside in school
districts from which the Department has | 14 |
| collected taxes under this
Act during the
preceding | 15 |
| calendar year. The amount to be paid to each
such | 16 |
| individual shall be determined by dividing the amount | 17 |
| collected from that
school district during
the preceding | 18 |
| calendar year and deposited into the
Property Tax Relief | 19 |
| Fund by the number of
persons who qualify for the general | 20 |
| homestead exemption or the alternative general homestead | 21 |
| exemption under Sections 15-175 and 15-176 of the Property | 22 |
| Tax Code who reside in that school district.
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| (3) 3.2% of all moneys collected under this Act shall | 24 |
| be deposited into
the
Local School Education Improvement | 25 |
| Fund, which is created in the
State treasury. On or before | 26 |
| the 25th day of each calendar month, the
Department of |
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| Revenue shall prepare and certify to the Comptroller the
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| disbursement of stated sums of money to named school | 3 |
| districts, the school
districts to be those from which the | 4 |
| Department has collected taxes under this
Act during the | 5 |
| second preceding calendar month. The amount to be paid to | 6 |
| each
school district shall be the amount collected from | 7 |
| that school district during
the second preceding calendar | 8 |
| month and deposited into the
Local School Education | 9 |
| Improvement Fund. Moneys distributed to a school
district | 10 |
| from the Local School Education Improvement Fund shall be
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| used
solely for educational improvement purposes not | 12 |
| directly related to classroom
instruction and | 13 |
| cooperatively administered by
appropriate agencies of the | 14 |
| municipality in which the school district is
located and | 15 |
| local school councils.
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| (4) 3.2% of all moneys collected under this Act shall | 17 |
| be deposited into
the
School District Tax Municipal Fund, | 18 |
| which is created in the
State treasury. On or before the | 19 |
| 25th day of each calendar month, the
Department of Revenue | 20 |
| shall prepare and certify to the Comptroller the
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| disbursement of stated sums of money to named | 22 |
| municipalities, the
municipalities to be those that | 23 |
| contain a school district from which the
Department has | 24 |
| collected taxes under this
Act during the second preceding | 25 |
| calendar month. The amount to be paid to each
municipality | 26 |
| shall be the amount collected from that school district |
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| during
the second preceding calendar month and deposited | 2 |
| into the School District Tax
Municipal
Fund. Moneys | 3 |
| distributed to a
municipality from the School District Tax | 4 |
| Municipal Fund shall be
used
in the discretion of the | 5 |
| corporate authority of the municipality.
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| (5) Up to 0.2% of the moneys collected under this Act | 7 |
| may be retained by
the
Department of Revenue for the costs | 8 |
| of collection, administration, and
enforcement under this | 9 |
| Act.
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| Section 30. Intent. Any moneys received by a school | 11 |
| district as a result of
this Act are intended to be in addition | 12 |
| to, and not in lieu of any other source
of funding and shall | 13 |
| not be used the supplant or replace any other source of
funding | 14 |
| Assistance Fund.
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| Section 900. The State Finance Act is amended by adding | 16 |
| Sections 5.675, 5.676, 5.677, 5.678, and 5.679 as follows: | 17 |
| (30 ILCS 105/5.675 new) | 18 |
| Sec. 5.675. The School District Income Tax Educational | 19 |
| Assistance Fund. | 20 |
| (30 ILCS 105/5.676 new)
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| Sec. 5.676. The School District Income Tax Refund Fund. |
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| (30 ILCS 105/5.677 new)
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| Sec. 5.677. The Property Tax Relief Fund. | 3 |
| (30 ILCS 105/5.678 new)
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| Sec. 5.678. The Local School Education Improvement Fund. | 5 |
| (30 ILCS 105/5.679 new)
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| Sec. 5.679. The School District Tax Municipal Fund.
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| Section 905. The School Code is amended by changing Section | 8 |
| 34A-501 as
follows:
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| (105 ILCS 5/34A-501) (from Ch. 122, par. 34A-501)
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| Sec. 34A-501. Power to issue Bonds.
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| (a) The Authority may incur
indebtedness by the issuance of | 12 |
| its negotiable full faith and credit
general obligation bonds | 13 |
| (the "Bonds") in an amount not to exceed at any
time the sum of | 14 |
| $895,000,000
$695,000,000 (excluding Bonds to be issued to | 15 |
| refund
outstanding Bonds) for the purpose of providing the | 16 |
| Board with moneys
for ordinary and necessary expenditures for | 17 |
| educational purposes,
maintenance of school facilities, and | 18 |
| other operational needs of the
Board; payment of outstanding | 19 |
| debt obligations of the Board and of the
City, the proceeds of | 20 |
| which were used to provide financing for the
Board; providing | 21 |
| or increasing a working cash fund as provided by paragraph
(d) | 22 |
| of this Section 34A-501; providing the Board with moneys for |
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| school
construction and rehabilitation purposes as provided by | 2 |
| paragraph (e) of
this Section; payment of fees for arrangements | 3 |
| as provided by paragraph (c)
of Section 34A-502; payment of | 4 |
| interest on Bonds; establishment of reserves to
secure Bonds; | 5 |
| the payment of costs of issuance of Bonds; payment of principal
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| of or interest or redemption premium on any Bonds or notes of | 7 |
| the Authority;
and all other expenditures of the Authority | 8 |
| incidental to and necessary or
convenient for carrying out its | 9 |
| corporate purposes and powers, and in an
additional amount not | 10 |
| to exceed at any time the sum of $427,000,000 (excluding
Bonds | 11 |
| to be issued to refund outstanding Bonds) for the purpose of | 12 |
| providing
the Board with moneys for ordinary and necessary | 13 |
| expenditures for educational
purposes, maintenance of school | 14 |
| facilities, and other operational needs of the
Board; payment | 15 |
| of fees for arrangements as provided by paragraph (c) of | 16 |
| Section
34A-502; payment in connection with agreements or | 17 |
| contracts entered into as
provided for in Section 7 of the Bond | 18 |
| Authorization Act; payment of interest on
Bonds; establishment | 19 |
| of reserves to secure
Bonds; the payment of costs of issuance | 20 |
| of Bonds; payment of principal of or
interest or redemption | 21 |
| premium on any Bonds or notes of the Authority; and all
other | 22 |
| expenditures of the Authority incidental to and necessary or | 23 |
| convenient
for carrying out its corporate purposes and powers. | 24 |
| No more than $40,000,000
of proceeds of Bonds of the Authority | 25 |
| shall be deposited in a working cash fund
as provided by | 26 |
| paragraph (d) of this Section 34A-501. No more than $95,000,000
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| of proceeds of Bonds of the Authority shall be provided to the | 2 |
| Board for school
construction and rehabilitation purposes; | 3 |
| provided that not less than
$32,000,000 nor more than | 4 |
| $37,000,000 of such proceeds shall be used by the
Board for | 5 |
| constructing new school buildings or providing additions
to | 6 |
| school buildings.
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| (b) The Authority may from time to time (i) issue Bonds to | 8 |
| refund
any outstanding Bonds or notes of the Authority whether | 9 |
| the Bonds or
notes to be refunded have or have not matured or | 10 |
| become redeemable and (ii)
issue Bonds partly to refund Bonds | 11 |
| or notes then outstanding and partly for
any other purpose | 12 |
| hereinabove set forth.
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| (c) Bonds issued in accordance with paragraph (a) of this | 14 |
| Section
may be issued in excess of any statutory limitation as
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| to debt, and may be issued without referendum.
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| (d) The Authority may create a working cash fund to provide | 17 |
| working
cash for the Board. Amounts in the working cash fund | 18 |
| shall be used by the
Authority to make loans from time to time | 19 |
| to the Board to enable the Board
to cover anticipated cash flow | 20 |
| deficiencies which it may experience within
the fiscal year of | 21 |
| the Board in which the loan is made, all as and to the
extent | 22 |
| determined by the Authority. The loans shall be made in such | 23 |
| amounts
and upon such terms as the Board and the Authority | 24 |
| shall agree. The Authority
shall not under any circumstance be | 25 |
| obligated to make any such loan. No
interest need be charged on | 26 |
| any such loan. The Board may pledge and assign
to the repayment |
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| of such loans and may apply to that repayment any particular
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| receipts of the Board which have not been pledged to the | 3 |
| payment of any of
the Board's bonds, notes, tax anticipation | 4 |
| warrants or state aid anticipation
certificates. Each loan | 5 |
| shall be required to be repaid in full by the Board
within the | 6 |
| fiscal year of the Board in which the loan was made and, in any
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| event, within 11 months from the date on which it was made. | 8 |
| Interest and
other investment earnings on the working cash fund | 9 |
| shall be deposited in
and shall be part of that fund. Whenever | 10 |
| the Authority shall determine
that all or part of the working | 11 |
| cash fund is no longer needed for making
loans to the Board as | 12 |
| provided in this paragraph, the Authority shall reduce
the | 13 |
| amount of the fund so that the amount in the fund does not | 14 |
| exceed the
amount which the Authority determines is necessary | 15 |
| for use for making future
loans to the Board as provided in | 16 |
| this paragraph. Upon any such reduction
in the amount of the | 17 |
| working cash fund and upon
its abolition, all amounts in excess | 18 |
| of the amounts to remain in the fund
shall be deposited in the | 19 |
| debt service fund established by the Authority
for the Bonds | 20 |
| for use for paying principal of Bonds at their maturity or
on | 21 |
| earlier redemption dates, redemption premium and any interest | 22 |
| accruing
on those Bonds, all as the Authority shall determine | 23 |
| and direct.
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| (e) For purposes of this Section, "school construction and
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| rehabilitation purposes" means constructing new school | 26 |
| buildings and
rehabilitating and accomplishing the deferred |
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| maintenance existing as of
August 31, 1984, of school | 2 |
| buildings, including, without limitation,
repairing, | 3 |
| modernizing, providing additions to and facilities in, | 4 |
| altering
and reconstructing school buildings and equipment.
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| Any interest or other investment earnings on proceeds of | 6 |
| Bonds issued for
the purpose of providing the Board with moneys | 7 |
| for school construction and
rehabilitation purposes shall be | 8 |
| applied as provided in the resolution
authorizing such Bonds, | 9 |
| which resolution shall require those earnings to
be used for | 10 |
| the same purpose as the proceeds of those Bonds or for the
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| payment of principal of or interest or redemption premium on | 12 |
| any Bonds,
either at maturity or an earlier redemption date. | 13 |
| Application by the
Authority of any proceeds of Bonds issued | 14 |
| for the purpose of providing the
Board with moneys for school | 15 |
| construction and rehabilitation purposes,
or interest or other | 16 |
| investment earnings thereon, shall be in the sole
judgment and | 17 |
| discretion of the Authority, but no such moneys shall be so
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| provided unless the Authority shall have found and determined, | 19 |
| in its sole
judgment and discretion, that such moneys are to be | 20 |
| used for those purposes
and not for providing the Board with | 21 |
| moneys for its ordinary and necessary
expenditures for | 22 |
| educational purposes, maintenance of school facilities or
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| other operational needs. Application by the Authority of any | 24 |
| proceeds of bonds issued for educational
purposes shall be in | 25 |
| the sole judgment and discretion of the Authority, but no
such | 26 |
| moneys shall be provided unless the Authority shall have found |
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| and
determined, in its sole judgment and discretion, that the | 2 |
| moneys are to be used
for educational purposes. The Authority | 3 |
| may, in making its findings and
determinations, rely upon | 4 |
| information provided by or on behalf of the Board.
The | 5 |
| Authority may from time to time make and amend regulations and | 6 |
| issue
directives with respect to the use and application of | 7 |
| such moneys.
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| The Authority may, at any time, in its sole judgment and | 9 |
| discretion,
deposit unexpended proceeds of Bonds issued for the | 10 |
| purpose of providing
the Board with moneys for school | 11 |
| construction and rehabilitation purposes
or interest or other | 12 |
| investment earnings thereon solely in a debt service
fund for | 13 |
| any Bonds and shall apply such moneys to the payment of | 14 |
| principal
of or interest or redemption premium on Bonds, at | 15 |
| maturity or an earlier
redemption date. In the resolution | 16 |
| authorizing Bonds, the
Authority may make commitments or | 17 |
| covenants to holders of Bonds with
respect to such use of such | 18 |
| unexpended proceeds and interest or other
investment earnings.
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| (Source: P.A. 88-511.)
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| Section 999. Effective date. This Act takes effect upon | 21 |
| becoming law. |
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