(30 ILCS 350/1) (from Ch. 17, par. 6901)
Sec. 1.
Short title.
This Act shall be known and may be cited as the
Local Government Debt Reform Act.
(Source: P.A. 85-1419.)
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(30 ILCS 350/2) (from Ch. 17, par. 6902)
Sec. 2.
Findings.
The General Assembly finds: (a) There have been
many and important changes in the market for and practices with respect to
the issuance of bonds of local governmental units in recent years.
(b) Various provisions of the Illinois law are inconsistent and outdated.
(c) Many of these provisions result in additional costs for the citizens
of the State of Illinois residing in local governmental units because of
the sale and issuance of bonds at higher rates than would otherwise be
necessary.
(d) The General Assembly deems it advisable and in the best interests of
the residents of Illinois local governmental units to provide supplemental
authority regarding the issuance and sale of bonds to accommodate such
market practices and the provisions of current federal income tax law.
(Source: P.A. 85-1419.)
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(30 ILCS 350/3) (from Ch. 17, par. 6903)
Sec. 3.
Definitions.
In this Act words or terms shall have the
following meanings unless the context or usage clearly indicates that
another meaning is intended.
(a) "Alternate bonds" means bonds issued in lieu of revenue bonds or
payable from a revenue source as provided in Section 15.
(b) "Applicable law" means any provision of law, including this Act,
authorizing governmental units to issue bonds.
(c) "Backdoor referendum" means the submission of a public question to
the voters of a governmental unit, initiated by a petition of voters,
residents or property owners of such governmental unit, to determine
whether an action by the governing body of such governmental unit shall be
effective, adopted or rejected.
(d) "Bond" means any instrument evidencing the obligation to pay money
authorized or issued by or on behalf of a governmental unit under
applicable law, including without limitation, bonds, notes, installment or
financing contracts, leases, certificates, tax anticipation warrants or
notes, vouchers, and any other evidences of indebtedness.
(e) "Debt service" on bonds means the amount of principal, interest and
premium, if any, when due either at stated maturity or upon mandatory
redemption.
(f) "Enterprise revenues" means the revenues of a utility or revenue
producing enterprise from which revenue bonds may be payable.
(g) "General obligation bonds" means bonds of a governmental unit for
the payment of which the governmental unit is empowered to levy ad valorem
property taxes upon all taxable property in a governmental unit without
limitation as to rate or amount.
(h) "Governing body" means the legislative body, council, board,
commission, trustees, or any other body, by whatever name it is known, having
charge of the corporate affairs of a governmental unit.
(h-5) "Governmental revenue source" means a revenue source that is either
(1) federal or State funds that the governmental unit has received in some
amount during each of the 3 fiscal years preceding the issuance of alternate
bonds or (2) revenues to be received from another governmental unit under an
intergovernmental cooperation agreement.
(i) "Governmental unit" means a county, township, municipality,
municipal corporation, unit of local government, school district, special
district, public corporation, body corporate and
politic, forest preserve
district, fire protection district, conservation district, park district,
sanitary district, and all
other local governmental agencies, including any entity created by
intergovernmental agreement among any of the foregoing governmental units,
but does not include any office, officer, department, division, bureau,
board, commission, university, or similar agency of the State.
(j) "Ordinance" means an ordinance duly adopted by a governing body or,
if appropriate under applicable law, a resolution so adopted.
(k) "Revenue bonds" means any bonds of a governmental unit other than
general obligation bonds, but "revenue bonds" does include any debt
authorized under Section 11-29.3-1 of the Illinois Municipal Code.
(l) "Revenue source" means a source of funds, other than enterprise
revenues, received or available to be received by a governmental unit and
available for any one or more of its corporate purposes.
(m) "Limited bonds" means bonds, excluding leases, notes, installment or
financing contracts, certificates, tax anticipation warrants or notes,
vouchers, and any other evidences of indebtedness, issued under Section
15.01 of this Act.
(Source: P.A. 92-879, eff. 1-13-03.)
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(30 ILCS 350/4) (from Ch. 17, par. 6904)
Sec. 4.
Powers supplemental.
The provisions of this Act are intended
to be supplemental and in addition to all other powers or authorities granted
to any governmental unit, shall be construed liberally and shall not be
construed as a limitation of any power or authority otherwise granted.
(Source: P.A. 85-1419.)
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(30 ILCS 350/5) (from Ch. 17, par. 6905)
Sec. 5.
Backdoor referendum procedure.
(a) Whenever applicable law
provides that the authorization or the issuance of bonds, or the becoming
effective of an ordinance providing for the authorization or issuance of
bonds, may be subject to a backdoor referendum, the provisions of this
Section may be used as an alternative to the specific procedures as
otherwise set forth by applicable law.
(b) The governing body may adopt an authorizing ordinance describing
briefly the authority under which bonds are proposed to be issued, the
nature of the project or purpose to be financed, the estimated total costs
of the project or purpose, including in such costs all items related to
financing the project or purpose, and the maximum amount of bonds
authorized to be issued to pay such costs. No further details or
specifications are required in such authorizing ordinance. Such
authorizing ordinance, along with any other notice as required by
applicable law, including any notice as to the right of electors to file a
petition and the number of voters required to sign any such petition, shall
be published at least once in a newspaper of general circulation in the
governmental unit. The governing body may, but is not required to, post the
notice electronically on its World Wide Web pages. A petition may be
filed after such publication or posting during the period as provided by
applicable law; but upon the expiration of any such period without the
filing of a petition meeting the requirements of the applicable law, the
governing body shall be authorized to issue such bonds as if they had
followed all necessary procedures set forth in such applicable law.
(c) If no petition meeting the requirements of applicable law is
filed during the petition period, then the governing body may adopt
additional ordinances or proceedings supplementing or amending the
authorizing ordinance so long as the maximum amount of bonds as set forth
in the authorizing ordinance is not exceeded and there is no material
change in the project or purpose described in the authorizing ordinance.
Such additional ordinances or proceedings shall in all instances become
effective immediately without publication or posting or any further act or
requirement. The authorizing ordinance, together with such additional
ordinance or proceedings, shall constitute complete authority for the
issuance of such bonds under applicable law.
(d) If applicable law provides that notice alone shall be given to
commence a backdoor referendum, the notice shall be published at least once in
a newspaper of general circulation in the governmental unit. The governing
body may, but is not required to, post the notice electronically on its World
Wide Web pages.
(Source: P.A. 91-868, eff. 6-22-00.)
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(30 ILCS 350/5.5)
Sec. 5.5.
Notices.
(a) Whenever applicable law requires notice in connection with the issuance
of bonds, the notice shall be sufficient if the notice appears above the name
or title of the person required to give the notice.
(b) Whenever applicable law requires any notice of a hearing or meeting held
in connection with the issuance of bonds to be supplied to the members of the
governing body or news media, such notice may be supplied by facsimile
transmission (commonly referred to as fax) or electronic transmission (commonly
referred to as e-mail).
(Source: P.A. 92-879, eff. 1-13-03.)
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(30 ILCS 350/6) (from Ch. 17, par. 6906)
Sec. 6.
Costs of project or purpose.
Whenever a governmental unit is
authorized by applicable law to issue bonds without referendum pursuant to
authority granted or mandate imposed to pay for some public purpose or
facility, the public corporation may add to the estimate of costs and
include in the authorized amount for
such bonds and pay from bond proceeds an amount to provide for expenses of
issuing such bonds, including underwriter's spread and costs of bond
insurance or other credit enhancement, and also an amount to pay capitalized
interest and provide a reserve fund as otherwise permitted by this Act.
(Source: P.A. 85-1419.)
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(30 ILCS 350/7) (from Ch. 17, par. 6907)
Sec. 7.
Reserves.
A governing body may provide for a reserve fund
solely for the payment of the principal of and interest on bonds. Bond
proceeds may be used to provide such reserve fund.
(Source: P.A. 85-1419.)
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(30 ILCS 350/8) (from Ch. 17, par. 6908)
Sec. 8.
Coverage covenant.
A governing body is authorized and may
covenant and contract with the holders of revenue bonds to levy, charge and
collect moneys pledged as security for the payment of revenue bonds in
amounts sufficient to provide for the prompt payment of debt service and to
provide an additional amount of money as coverage computed as a percentage
of the amount of debt service scheduled to be payable in any given year.
(Source: P.A. 85-1419.)
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(30 ILCS 350/9) (from Ch. 17, par. 6909)
Sec. 9.
Provisions for interest.
(a) The proceeds of bonds may be used
to provide for the payment of interest upon such bonds for a period not to
exceed the greater of 2 years or a period ending 6 months after the
estimated date of completion of the acquisition and construction of the
project or accomplishment of the purpose for which such bonds are issued.
(b) In addition it shall be lawful for the governing body of any
governmental unit issuing bonds to appropriate money for the purpose of
paying interest on such bonds during the period stated in subsection (a) of
this Section. Such appropriation may be made in the ordinance authorizing
such bonds and shall be fully effective upon the effective date of such
ordinance without any further notice, publication or approval whatsoever.
(c) The governing body of any governmental unit may authorize the transfer
of interest earned on any of the moneys of the governmental unit, including
moneys set aside to pay debt service, into the fund of the governmental unit
that is most in need of the interest. This subsection does not apply to any
interest earned that has been earmarked or restricted by the governing body for
a designated purpose. This subsection does not apply to any interest earned on
any funds for the purpose of municipal retirement under the Illinois Pension
Code and tort immunity under the Local Governmental and Governmental Employees
Tort Immunity Act. Interest earned on those funds may be used only for the
purposes authorized for the respective funds from which the interest earnings
were derived.
(Source: P.A. 92-879, eff. 1-13-03.)
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(30 ILCS 350/10) (from Ch. 17, par. 6910) Sec. 10. General provisions. Bonds authorized by applicable law may be issued in one or more series, bear such date or dates, become due at such time or times within 40 years, except as expressly limited by applicable law, provided that notwithstanding any such express limitation bonds issued by any school district, South Suburban Community College District No. 510, Elgin Community College District No. 509, or Kishwaukee Community College District No. 523 for the purpose of purchasing, constructing, or improving real or personal property, including bonds issued pursuant to Sections 17-2.11 of the School Code, bonds issued to increase the working cash fund of the district, and bonds issued to pay claims against the district incurred for the purpose of purchasing, constructing, or improving real or personal property, and any bonds issued to refund or continue to refund those bonds, may become due within 30 years, bear interest payable at such intervals and at such rate or rates as authorized under applicable law, which rates may be fixed or variable, be in such denominations, be in such form, either coupon, registered or book-entry, carry such conversion, registration, and exchange privileges, be subject to defeasance upon such terms, have such rank or priority, be executed in such manner, be payable in such medium of payment at such place or places within or without the State of Illinois, make provision for a corporate trustee within or without the State with respect to such bonds, prescribe the rights, powers and duties thereof to be exercised for the benefit of the governmental unit and the protection of the bondholders, provide for the holding in trust, investment and use of moneys, funds and accounts held under an ordinance, provide for assignment of and direct payment of the moneys to pay such bonds or to be deposited into such funds or accounts directly to such trustee, be subject to such terms of redemption with or without premium, and be sold in such manner at private or public sale and at such price, all as the governing body shall determine. Whenever such bonds are sold at price less than par, they shall be sold at such price and bear interest at such rate or rates such that either the true interest cost (yield) or the net interest rate, as may be selected by the governing body, received upon the sale of such bonds does not exceed the maximum rate otherwise authorized by applicable law. Except for an ordinance required to be published by applicable law in connection with a backdoor referendum, any bond ordinance adopted by a governing body under applicable law shall, in all instances, become effective immediately without publication or posting or any further act or requirement.(Source: P.A. 103-591, eff. 7-1-24.) |
(30 ILCS 350/11) (from Ch. 17, par. 6911)
Sec. 11.
Refundings and redemption premiums.
Bonds may be refunded
or advance refunded upon such terms as the governing body may set in accordance
with this Act, for such term of years, not in excess of the maximum term of
years permitted by applicable law for the bonds to be refunded, and in such
principal amount, all as may be deemed necessary by the governing body.
Revenue bonds may be issued to refund general
obligation bonds or alternate
bonds issued under this Act. General obligation bonds shall not be issued to
refund revenue bonds or alternate bonds except as expressly permitted by
applicable law. Any redemption premium payable upon the redemption of
bonds may be payable from the proceeds of refunding bonds which may be
issued for the purpose of refunding such bonds, from any other lawfully
available source or from both proceeds and such other sources.
(Source: P.A. 90-306, eff. 8-1-97.)
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(30 ILCS 350/12) (from Ch. 17, par. 6912)
Sec. 12. Invest in tax-exempts; joint investments. In addition to the authority
otherwise available to invest funds, a governing body may authorize and
upon such authorization the treasurer of any governmental unit may (i) invest
proceeds of bonds or money on deposit in any debt service or reserve fund
or account relating to bonds in obligations the interest upon which is
tax-exempt under the provisions of Section 103 of the Internal Revenue Code
of 1986, as now or hereafter amended, or any successor code or provision,
subject to such tax-exempt obligations being rated at the time of purchase
within the 4 highest general classifications established by a rating
service of nationally recognized expertise in rating bonds of states and
the political subdivisions thereof and (ii) join with the treasurers of other governmental units for the purpose of jointly investing the funds of which the treasurer has custody.
(Source: P.A. 96-964, eff. 7-2-10.)
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(30 ILCS 350/13) (from Ch. 17, par. 6913)
Sec. 13.
Certain pledges.
A governmental unit may pledge, as
security for the payment of its bonds, (1) revenues derived from the
operation of any utility system or revenue producing enterprise, (2) moneys
deposited or to be deposited into any special fund of the governmental
unit, (3) grants or other revenues or taxes expected to be received by the
governmental unit from the State or federal government, including taxes
imposed by the governmental unit pursuant to grant of authority by the
State, such as sales or use taxes or utility taxes, (4) special assessments
to be collected with respect to a local improvement financed with the
proceeds of bonds, or (5) payments to be made by another governmental unit
pursuant to a service, user or other similar agreement with such
governmental unit.
Any such pledge made by a governmental unit shall be valid and binding
from the time such pledge is made. The revenues, moneys and other funds so
pledged and thereafter received by the governmental unit shall immediately
be subject to the lien of such pledge without any physical delivery thereof
or further act; and, subject only to the provisions of prior agreements,
the lien of such pledge shall be valid and binding as against all parties
having claims of any kind in tort, contract or otherwise against the
governmental unit irrespective of whether such parties have notice thereof.
Pursuant to any such pledge, a governmental unit may bind itself to impose
rates, charges or taxes to the fullest extent permitted by applicable law.
No ordinance, resolution, trust agreement or other instrument by which such
pledge is created need be filed or recorded except in the records of the
governmental unit.
The State Treasurer, the State Comptroller, the Department of Revenue, the
Department of Transportation, the State Superintendent of Education, or any
Regional Superintendent of Schools shall deposit or cause to be deposited any
amount of grants or other revenues or taxes expected to be received by a
qualified governmental unit from that official or entity that have been
pledged to the
payment of bonds of the qualified governmental unit, in accordance with the
authorization
of the qualified governmental unit, directly into a designated escrow
account established
by the qualified governmental unit at a trust company or bank having
trust powers. The ordinance authorizing that
disposition shall,
within 10 days after adoption by the governing body of the
qualified governmental unit,
be filed with the official or entity having custody of the pledged grants or
other revenues or taxes.
For the purposes of this Section, "qualified governmental unit" means a
governmental
unit (i) that has issued not less than $6,000,000 principal amount of bonds,
including the principal
amount of bonds to be secured by the deposit into the designated escrow
account, during the 24
months preceding the adoption of the ordinance authorizing the deposit, (ii)
whose bonds secured
by the deposit into the designated escrow account are rated without regard to
any credit
enhancement within the 3 highest general rating classifications established by
a rating service of
nationally recognized expertise in rating bonds of states and political
subdivisions of states,
(iii) that has received the Certificate of Achievement for Excellence in
Financial Reporting from
the Government Finance Officers Association or the equivalent award from the
Association of School Business Officials International during the 24 months
preceding the
adoption of the
ordinance authorizing the deposit, or (iv) that represents a population in
excess of 300,000.
(Source: P.A. 91-868, eff. 6-22-00; 92-78, eff. 7-12-01.)
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(30 ILCS 350/14) (from Ch. 17, par. 6914)
Sec. 14.
Certain warrant provisions.
Whenever applicable law permits
a governmental unit to issue warrants in anticipation of taxes to be levied
or other funds to be received, the governing body of such governmental unit
may cause such warrants to have a specified due date reasonably calculated
to be after the receipt of the taxes or other revenues anticipated, may
designate and so cause such warrants to be general obligation bonds within
the meaning of this Act, may provide for refunding warrants or general
obligation bonds to refund such warrants should the taxes or other revenues
to pay the same be delayed or insufficient to pay the same, and may provide
for the separate levy of taxes, without limitation as to rate or amount, on
all ad valorem taxable property within the governmental unit, to pay such
warrants or refunding warrants or bonds. Nothing herein shall authorize
the issuance of warrants in excess of the amount otherwise permitted by
applicable law. The county collector shall deposit any amount of tax
proceeds pledged to the payment of warrants of any governmental unit, in
accordance with the authorization of such governmental unit, directly into
a designated escrow account established by the governmental unit. The
ordinance authorizing such disposition shall be filed with the county
collector or collectors of the county or counties within which taxable
property of the governmental unit is located.
Warrants initially issued pursuant to this Act shall not be regarded as or
included in any computation of indebtedness for the purpose of any
statutory provision or limitation. General obligation bonds to refund
warrants issued hereunder or refunding warrants may be issued without
regard to existing indebtedness but upon being issued shall be included and
regarded as indebtedness.
(Source: P.A. 85-1419.)
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(30 ILCS 350/15) (from Ch. 17, par. 6915)
Sec. 15. Double-barrelled bonds. Whenever revenue bonds have been
authorized to be issued pursuant to applicable law or whenever there exists
for a governmental unit a revenue source, the procedures set forth in this
Section may be used by a governing body. General obligation bonds may be
issued in lieu of such revenue bonds as authorized, and general obligation
bonds may be issued payable from any revenue source. Such general
obligation bonds may be referred to as "alternate bonds". Alternate bonds
may be issued without any referendum or backdoor referendum except as
provided in this Section, upon the terms provided in Section 10 of this Act
without reference to other provisions of law, but only upon the conditions
provided in this Section. Alternate bonds shall not be regarded as or
included in any computation of indebtedness for the purpose of any
statutory provision or limitation except as expressly provided in this Section.
Such conditions are:
(a) Alternate bonds shall be issued for a lawful
corporate purpose. If issued in lieu of revenue bonds, alternate bonds
shall be issued for the purposes for which such revenue bonds shall have
been authorized. If issued payable from a revenue source in the manner
hereinafter provided, which revenue source is limited in its purposes or
applications, then the alternate bonds shall be issued only for such
limited purposes or applications. Alternate bonds may be issued payable
from either enterprise revenues or revenue sources, or both.
(b) Alternate bonds shall be subject to backdoor referendum. The
provisions of Section 5 of this Act shall apply to such backdoor
referendum, together with the provisions hereof. The authorizing ordinance
shall be published in a newspaper of general circulation in the
governmental unit. Along with or as part of the authorizing ordinance,
there shall be published a notice of (1) the specific number of voters
required to sign a petition requesting that the issuance of the alternate
bonds be submitted to referendum, (2) the time when such petition must
be filed, (3) the date of the prospective referendum, and
(4), with respect to authorizing ordinances adopted on or after January 1,
1991, a statement that identifies any revenue source that will be used to
pay debt service on the alternate bonds.
The clerk or
secretary of the governmental unit shall make a petition form available to
anyone requesting one. Except as provided in the following paragraph, if no petition is filed with the clerk or secretary
within 30 days of publication of the authorizing ordinance and notice, the
alternate bonds shall be authorized to be issued. But if within this 30
days period, a petition is filed with such clerk or secretary signed by
electors numbering the greater of (i) 7.5% of the registered
voters in the governmental unit or (ii) 200 of those registered voters or
15% of those registered voters, whichever is less,
asking that the issuance of such alternate bonds be submitted to
referendum, the clerk or secretary shall certify such question for
submission at an election held in accordance with the general election law.
Notwithstanding the previous paragraph, in governmental units with fewer than 500,000 inhabitants that propose to issue alternate bonds payable solely from enterprise revenues as defined under Section 3 of this Act, except for such alternate bonds that finance or refinance projects concerning public utilities, public streets and roads or public safety facilities, and related infrastructure and equipment, if no petition is filed with the clerk or secretary
within 45 days of publication of the authorizing ordinance and notice, the
alternate bonds shall be authorized to be issued. But if, within this 45-day period, a petition is filed with such clerk or secretary signed by the necessary number of electors, asking that the issuance of such alternate bonds be submitted to
referendum, the clerk or secretary shall certify such question for
submission at an election held in accordance with the general election law. For purposes of this paragraph, the necessary number of electors for a governmental unit with more than 4,000 registered voters is the lesser of (i) 5% of the registered voters or (ii) 5,000 registered voters; and the necessary number of electors for a governmental unit with 4,000 or fewer registered voters is the lesser of (i) 15% of the registered voters or (ii) 200 registered voters. The question on the ballot shall include a statement of any
revenue source that will be used to pay debt service on
the alternate bonds. The alternate bonds shall be authorized to be issued
if a majority of the votes cast on the question at such election are in
favor thereof
provided that notice of the bond referendum, if held before July 1, 1999,
has been given in accordance with the provisions of Section
12-5
of the Election Code
in effect at the time of the bond referendum, at least 10 and not more than
45 days before the date of
the election, notwithstanding the time for publication otherwise imposed by
Section 12-5.
Notices required in connection with the submission of public questions
on or after July 1, 1999 shall be as set forth in Section 12-5 of the Election
Code.
Backdoor referendum proceedings for bonds and alternate
bonds to be issued in lieu of such bonds may be conducted at the same time.
(c) To the extent payable from enterprise revenues, such revenues shall
have been determined by the governing body to be sufficient to provide for
or pay in each year to final maturity of such alternate bonds all of the
following: (1) costs of operation and maintenance of the utility or
enterprise, but not including depreciation, (2) debt service on all
outstanding revenue bonds payable from such enterprise revenues, (3) all
amounts required to meet any fund or account requirements with respect to
such outstanding revenue bonds, (4) other contractual or tort liability
obligations, if any, payable from such enterprise revenues, and (5) in each
year, an amount not less than 1.25 times debt service of all (i) alternate
bonds payable from such enterprise revenues previously issued and
outstanding and (ii) alternate bonds proposed to be issued.
To the extent
payable from one or more revenue sources, such sources shall have been
determined by the governing body to provide in each year, an amount not
less than 1.25 times debt service of all alternate bonds payable from such
revenue sources previously issued and outstanding and alternate bonds
proposed to be issued.
The 1.25 figure in the preceding sentence shall be reduced to 1.10 if the
revenue source is a governmental revenue source.
The conditions enumerated in this subsection (c)
need not be met for that amount of debt service provided for by the setting
aside of proceeds of bonds or other moneys at the time of the delivery of
such bonds.
(c-1) In the case of alternate bonds issued as variable rate bonds
(including
refunding bonds), debt service shall be projected based on the rate for the
most recent
date shown in the 20 G.O. Bond Index of average municipal bond yields as
published in
the most recent edition of The Bond Buyer published in New York, New York (or
any
successor publication or index, or if such publication or index is no longer
published,
then any index of long-term municipal tax-exempt bond yields selected by the
governmental unit), as of the date of determination referred to in subsection (c) of this
Section. Any interest or fees that may be payable to the provider of a letter of credit, line
of credit, surety bond, bond insurance, or other credit enhancement relating to such
alternate bonds and any fees that may be payable to any remarketing agent need not be
taken into account for purposes of such projection. If the governmental unit enters into
an agreement in connection with such alternate bonds at the time of issuance
thereof
pursuant to which the governmental unit agrees for a specified period of time
to pay an
amount calculated at an agreed-upon rate or index based on a notional amount
and the other party agrees to pay the governmental unit an amount calculated at
an agreed-upon rate or index based on such notional amount, interest
shall be projected for such specified period of time on the basis of the
agreed-upon rate
payable by the governmental unit.
(d) The determination of the sufficiency of enterprise revenues or a
revenue source, as applicable, shall be supported by reference to the most
recent audit of the governmental unit, which shall be for a fiscal year
ending not earlier than 18 months previous to the time of issuance of the
alternate bonds. If such audit does not adequately show such enterprise
revenues or revenue source, as applicable, or if such enterprise revenues
or revenue source, as applicable, are shown to be insufficient, then the
determination of sufficiency shall be supported by the report of an
independent accountant or feasibility analyst, the latter having a national
reputation
for expertise in such matters, who is not otherwise involved in the project being financed or refinanced with the proceeds of the alternate bonds, demonstrating the sufficiency of such
revenues and explaining, if appropriate, by what means the revenues will be
greater than as shown in the audit. Whenever such sufficiency is
demonstrated by reference to a schedule of higher rates or charges for
enterprise revenues or a higher tax imposition for a revenue source, such
higher rates, charges or taxes shall have been properly imposed by an
ordinance adopted prior to the time of delivery of alternate bonds. The
reference to and acceptance of an audit or report, as the case may be, and
the determination of the governing body as to sufficiency of enterprise
revenues or a revenue source shall be conclusive evidence that the
conditions of this Section have been met and that the alternate bonds
are valid.
(e) The enterprise revenues or revenue source, as applicable, shall be
in fact pledged to the payment of the alternate bonds; and the governing
body shall covenant, to the extent it is empowered to do so, to provide
for, collect and apply such enterprise revenues or revenue source, as
applicable, to the payment of the alternate bonds and the provision of
not less than an additional .25 (or .10 for governmental revenue sources)
times debt service. The pledge and
establishment of rates or charges for enterprise revenues, or the
imposition of taxes in a given rate or amount, as provided in this Section
for alternate bonds, shall constitute a continuing obligation of the
governmental unit with respect to such establishment or imposition and a
continuing appropriation of the amounts received. All covenants relating
to alternate bonds and the conditions and obligations imposed by this
Section are enforceable by any bondholder of alternate bonds affected, any
taxpayer of the governmental unit, and the People of the State of Illinois
acting through the Attorney General or any designee, and in the event that
any such action results in an order finding that the governmental unit has
not properly set rates or charges or imposed taxes to the extent it is
empowered to do so or collected and applied enterprise revenues or any
revenue source, as applicable, as required by this Act, the plaintiff in
any such action shall be awarded reasonable attorney's fees. The intent is
that such enterprise revenues or revenue source, as applicable, shall be
sufficient and shall be applied to the payment of debt service on such
alternate bonds so that taxes need not be levied, or if levied need not be
extended, for such payment. Nothing in this Section shall inhibit or
restrict the authority of a governing body to determine the lien priority
of any bonds, including alternate bonds, which may be issued with respect
to any enterprise revenues or revenue source.
In the event that alternate bonds shall have been issued and taxes, other
than a designated revenue source, shall have been extended pursuant to the
general obligation, full faith and credit promise supporting such alternate
bonds, then the amount of such alternate bonds then outstanding shall be
included in the computation of indebtedness of the governmental unit for
purposes of all statutory provisions or limitations until such time as an
audit of the governmental unit shall show that the alternate bonds have
been paid from the enterprise revenues or revenue source, as applicable,
pledged thereto for a complete fiscal year.
Alternate bonds may be issued to refund or advance refund alternate bonds
without meeting any of the conditions set forth in this Section, except
that the term of the refunding bonds shall not be longer than the term of
the refunded bonds and that the debt service payable in any year on the
refunding bonds shall not exceed the debt service payable in such year on
the refunded bonds.
Once issued, alternate bonds shall be and forever remain until paid or
defeased the general obligation of the governmental unit, for the payment
of which its full faith and credit are pledged, and shall be payable from
the levy of taxes as is provided in this Act for general obligation bonds.
The changes made by this amendatory Act of 1990 do not affect the
validity of bonds authorized before September 1, 1990.
(Source: P.A. 97-542, eff. 8-23-11; 98-203, eff. 1-1-14.)
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(30 ILCS 350/15.01)
Sec. 15.01.
Limited bonds.
A governmental unit is authorized
to issue limited bonds payable from the debt service extension base, as defined
in the Property Tax Extension Limitation Law, as provided in this amendatory
Act of 1995. Bonds authorized by Public Act 88-503 and issued under Section
20a
of the
Chicago Park District Act for aquarium or museum projects shall not be issued
as limited bonds.
A
governmental unit issuing limited bonds authorized by this Section shall
provide in the bond ordinance that the bonds are issued as
limited
bonds and are also issued pursuant to applicable law, other than this
amendatory Act of 1995, enabling the governmental unit to issue bonds. This
amendatory Act of 1995 shall not change the rate, amount, purposes,
limitations,
source of funds for payment of principal or interest, or method of
payment or defeasance of the bonds that a governmental unit may issue under any
applicable law; provided, that limited bonds that are otherwise to be issued as
general obligation bonds may be payable solely from the debt service extension
base. This amendatory Act of 1995
provides no additional authority to any governmental unit to issue bonds that
the governmental unit is not otherwise authorized to issue by a law other than
this amendatory Act of 1995.
(Source: P.A. 89-385, eff. 8-18-95; 89-449, eff. 6-1-96.)
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(30 ILCS 350/16) (from Ch. 17, par. 6916) Sec. 16. Levy for bonds. (a) A governmental unit may levy a tax for the payment of principal of and interest on general obligation bonds or limited bonds at any time prior to March 1 of the calendar year during which the tax will be collected. The county clerk shall accept the filing of the ordinance levying such tax notwithstanding that such time is subsequent to the end of the calendar year next preceding the calendar year during which such tax will be collected. (b) The county clerk shall accept the electronic filing of any ordinance under subsection (a) and any certificate abating taxes levied by an ordinance under subsection (a). If a governmental unit electronically files an ordinance under subsection (a) or a certificate abating taxes levied by an ordinance under subsection (a), then the governmental unit shall maintain an original signed copy of the ordinance as long as the general obligation bonds or limited bonds remain outstanding. (c) In extending taxes for general obligation bonds, the county clerk shall add to the levy for debt service on such bonds an amount sufficient, in view of all losses and delinquencies in tax collection, to produce tax receipts adequate for the prompt payment of such debt service.(Source: P.A. 103-137, eff. 6-30-23; 103-591, eff. 7-1-24.) |
(30 ILCS 350/16.5)
Sec. 16.5. Proposition for bonds. For all elections held after July 1,
2000, the form of a proposition to authorize the issuance of bonds pursuant to
either a referendum or backdoor referendum may be as set forth in this Section
as an alternative to the form of proposition as otherwise set forth by
applicable law. The proposition authorized by this Section shall be in
substantially the following form:
Shall (name of governmental unit) (state purpose for | ||
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If a school district receives a conditional grant award from the Capital Development Board pursuant to Section 5-15 of the School Construction Law for the school
construction project to be financed in part with proceeds of the bonds authorized
by referendum, then the form of proposition may at the option of the school
district additionally contain substantially the following language:
(Name of school district) expects to receive a school | ||
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(Source: P.A. 102-723, eff. 5-6-22.)
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(30 ILCS 350/17) (from Ch. 17, par. 6917) Sec. 17. Leases and installment contracts. (a) Interest not debt; debt on leases and installment contracts. Interest on bonds shall not be included in any computation of indebtedness of a governmental unit for the purpose of any statutory provision or limitation. For bonds consisting of leases and installment or financing contracts, (1) that portion of payments made by a governmental unit under the terms of a bond designated as interest in the bond or the ordinance authorizing such bond shall be treated as interest for purposes of this Section (2) where portions of payments due under the terms of a bond have not been designated as interest in the bond or the ordinance authorizing such bond, and all or a portion of such payments is to be used for the payment of principal of and interest on other bonds of the governmental unit or bonds issued by another unit of local government, such as a public building commission, the payments equal to interest due on such corresponding bonds shall be treated as interest for purposes of this Section and (3) where portions of payments due under the terms of a bond have not been designated as interest in the bond or ordinance authorizing such bond and no portion of any such payment is to be used for the payment of principal of and interest on other bonds of the governmental unit or another unit of local government, a portion of each payment due under the terms of such bond shall be treated as interest for purposes of this Section; such portion shall be equal in amount to the interest that would have been paid on a notional obligation of the governmental unit (bearing interest at the highest rate permitted by law for bonds of the governmental unit at the time the bond was issued or, if no such limit existed, 12%) on which the payments of principal and interest were due at the same times and in the same amounts as payments are due under the terms of the bonds. The rule set forth in this Section shall be applicable to all interest no matter when earned or accrued or at what interval paid, and whether or not a bond bears interest which compounds at certain intervals. For purposes of bonds sold at amounts less than 95% of their stated value at maturity, interest for purposes of this Section includes the difference between the amount set forth on the face of the bond as the original principal amount and the bond's stated value at maturity. This subsection may be made applicable to bonds issued prior to the effective date of this Act by passage of an ordinance to such effect by the governing body of a governmental unit. (b) Purchase or lease of property. The governing body of each governmental unit may purchase or lease either real or personal property, including investments, investment agreements, or investment services, through agreements that provide that the consideration for the purchase or lease may be paid through installments made at stated intervals for a period of no more than 20 years or another period of time authorized by law, whichever is greater; provided, however, that investments, investment agreements, or investment services purchased in connection with a bond issue may be paid through installments made at stated intervals for a period of time not in excess of the maximum term of such bond issue. Each governmental unit may issue certificates evidencing the indebtedness incurred under the lease or agreement. The governing body may provide for the treasurer, comptroller, finance officer, or other officer of the governing body charged with financial administration to act as counter-party to any such lease or agreement, as nominee lessor or seller. When the lease or agreement is executed by the officer of the governmental unit authorized by the governing body to bind the governmental unit thereon by the execution thereof and is filed with and executed by the nominee lessor or seller, the lease or agreement shall be sufficiently executed so as to permit the governmental unit to issue certificates evidencing the indebtedness incurred under the lease or agreement. The certificates shall be valid whether or not an appropriation with respect thereto is included in any annual or supplemental budget adopted by the governmental unit. From time to time, as the governing body executes contracts for the purpose of acquiring and constructing the services or real or personal property that is a part of the subject of the lease or agreement, including financial, legal, architectural, and engineering services related to the lease or agreement, the contracts shall be filed with the nominee officer, and that officer shall identify the contracts to the lease or agreement; that identification shall permit the payment of the contract from the proceeds of the certificates; and the nominee officer shall duly apply or cause to be applied proceeds of the certificates to the payment of the contracts. The governing body of each governmental unit may sell, lease, convey, and reacquire either real or personal property, or any interest in real or personal property, upon any terms and conditions and in any manner, as the governing body shall determine, if the governmental unit will lease, acquire by purchase agreement, or otherwise reacquire the property, as authorized by this subsection or any other applicable law. All indebtedness incurred under this subsection, when aggregated with the existing indebtedness of the governmental unit, may not exceed the debt limits provided by applicable law.(Source: P.A. 103-591, eff. 7-1-24.) |
(30 ILCS 350/17.5) Sec. 17.5. Bond authorization by referendum. (a) Whenever applicable law
provides
that the authorization of or the issuance of bonds is subject to either a
referendum or backdoor referendum, the approval, once obtained, remains
(i) for 5 years
after the date
of the referendum or (ii) for 3 years after the end of the petition
period for a
backdoor referendum. However, whenever the applicable law
provides
that the authorization of or the issuance of bonds under the Water Pollution Control Loan Program or the Public Water Supply Loan Program, under Title IV-A of the Environmental Protection Act, is subject to either a referendum or backdoor referendum, the approval, once obtained, remains (i) for 7 years after the date of the referendum or (ii) for 5 years after the end of the petition period for a backdoor referendum. In the case of bonds authorized to be issued under the Downstate Forest Preserve District Act and approved by Lake County voters in a November 2008 referendum or in the case of bonds authorized to be issued under the School Code and approved by voters of Sandoval Community Unit School District 501 in a March 2012 referendum, the approval, once obtained, remains for 10 years after the date of the referendum. In the case of bonds authorized to be issued under the Counties Code and approved by Jackson County voters in a 1994 referendum, of which less than $200,000 of the original bonds have been issued, and for which the purpose of the bonds is flooding prevention, the approval, once obtained, remains for 25 years after the date of the referendum. (b) With respect to any bond approval under subsection (a), if, for any reason, the bonds are not issued because of a court action, then the time limits set forth under subsection (a) for the approval for the bonds is tolled during the time that the court action is pending. This subsection (b) applies to any bond issuance approved by referendum held on or after January 1, 2003 or by a backdoor referendum held on or after January 1, 2005. (Source: P.A. 98-655, eff. 6-18-14; 99-926, eff. 1-20-17.) |
(30 ILCS 350/18) (from Ch. 17, par. 6918)
Sec. 18.
Recital.
Bonds which are issued in part pursuant to this
Act may contain a recital to that effect and any such recital shall be
conclusive as against the governmental unit and the governing body thereof
and any other person as to the validity of the bonds and as to their
compliance with the provisions of this Act.
(Source: P.A. 85-1419.)
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