(65 ILCS 5/11-122-4) (from Ch. 24, par. 11-122-4)
Sec. 11-122-4.
In lieu of issuing bonds pledging the faith and credit of
the city, as provided for in Section 11-122-3, any city may issue and
dispose of interest bearing certificates, to be known as "street railway
certificates," which, under no circumstances, shall be or become an
obligation or liability of the city or payable out of any general fund
thereof, but shall be payable solely out of a specified portion of the
income to be derived from the street railway property for the acquisition
of which they were issued. These certificates shall not be issued and
secured by any street railway property in an amount in excess of the cost
to the city of that property, as provided in this Division 122, and 10% of
that cost in addition thereto.
In order to secure the payment of these street railway certificates and
the interest thereon, the city may convey, by way of mortgage or deed of
trust, any or all of the street railway property acquired or to be acquired
through the issuance thereof. This mortgage or deed of trust shall be
executed in such manner as may be directed by the city council and
acknowledged and recorded in the manner provided by law for the
acknowledgment and recording of mortgages of real estate, and may contain
such provisions and conditions not in conflict with the provisions of this
Division 122 as may be deemed necessary to fully secure the payment of the
street railway certificates described therein. The mortgage or deed of
trust may contain the grant of a privilege or right to maintain and operate
the street railway property covered thereby, for a period not exceeding 20
years from the date that that property may come into the possession of any
person as the result of foreclosure proceedings. This privilege or right
may fix the rates of fare which the person securing the privilege or right
as the result of foreclosure proceedings shall be entitled to charge in the
operation of the property for a period not exceeding 20 years.
Whenever, and as often as, default is made in the payment of any street
railway certificate issued and secured by a mortgage or deed of trust, as
provided in this section, or in the payment of the interest thereon when
due, and that default has continued for the space of 12 months, after
notice thereof has been given to the mayor and the financial officer of the
city issuing the certificates, it is lawful for the mortgagee or trustee,
upon the request of the holders of a majority in amount of the certificates
issued and outstanding under the mortgage or deed of trust, to declare the
whole of the principal of all such certificates as may be outstanding, to
be at once due and payable, and to proceed to foreclose the mortgage or
deed of trust in any court of competent jurisdiction.
At a foreclosure sale, the mortgagee, or trustee, or the holders of the
certificates may become the purchaser or purchasers of the property and the
rights and privileges sold, if he or they be the highest bidders. Any
street railway acquired under such a foreclosure shall be subject to
regulation by the corporate authorities of the city to the same extent as
if the right to construct, maintain, and operate that property had been
acquired through a direct grant without the intervention of foreclosure
proceedings.
However, no street railway certificates, mortgage, or deed of trust
shall ever be issued by any city under the provisions of this Division 122
until the question of the adoption of the ordinance making provision for
the issuance thereof has been submitted to a popular vote and approved by a
majority of the electors of the city voting upon that question.
(Source: Laws 1961, p. 576.)
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