(50 ILCS 410/3) (from Ch. 85, par. 4303)
Sec. 3.
In connection with the issuance of its bonds, a
governmental unit may enter into
agreements (credit agreements) to
provide additional security or liquidity, or both, for the
bonds. These
may include, without limitation, municipal bond insurance, letters of
credit, lines of credit, standby bond purchase agreements, surety bonds, and
the like, by which the governmental unit may borrow funds to pay or redeem or purchase and hold its bonds
and a governmental unit may enter into agreements for the purchase or
remarketing of bonds (remarketing agreements) for
providing a mechanism for remarketing bonds tendered for purchase in
accordance with their terms. The term of such credit agreements or remarketing
agreements shall not exceed the term of the bonds, plus any time period
necessary to cure any defaults under such agreements.
Without limiting the terms which may be included in any such credit
agreements
or remarketing agreements, the ordinance
may
or, if hereinafter so required, shall
provide as follows:
(a) Interest rates on the bonds may vary from time to time
depending
upon criteria established by the governing body, which may
include,
without limitation: (i) a variation in interest rates as may be
necessary to
cause bonds to be remarketed from time to time at a price
equal to their
principal amount
plus any accrued interest; (ii) rates set by auctions; or (iii) rates set by
formula.
(b) A national banking
association, bank, trust company, investment banker or other financial
institution may be appointed to serve as a remarketing agent in that
connection, and such remarketing agent may be delegated authority by the
governing body
to
determine interest rates in accordance with criteria established by the
governing body.
(c) Alternative interest rates or provisions may apply
during
such times as the bonds are held by the person or persons
(financial providers) providing a credit agreement or remarketing
agreement for those bonds
and during such times, the interest on the bonds may be deemed not exempt
from
income taxation under the Internal Revenue Code for purposes of State law, as
contained in the Bond Authorization Act, relating to the permissible rate of
interest to be borne thereon.
(d) Fees may be paid to the financial providers, including all reasonably
related costs, including therein costs of enforcement and litigation (all such
fees and costs being financial provider payments) and financial provider
payments may be paid, without limitation, from proceeds of the bonds being the
subject of such agreements, or from bonds issued to refund such bonds, or from
whatever enterprise revenues or revenue source, including taxes, pledged to the
payment of such bonds, which enterprise revenues or revenue source may be
increased to make such financial provider payments, and such financial provider
payments shall be made subordinate to the payments on the bonds.
(e) The bonds need not be held in physical form by the financial providers
when
providing funds to purchase or carry the bonds from others but may be
represented in uncertificated form in the credit agreements or remarketing
agreements.
(f) The debt or obligation of the governmental unit represented by a bond
tendered for purchase to or otherwise made available to the governmental unit
and thereupon acquired by either such governmental unit or a financial provider
shall not be deemed to be extinguished for purposes of State law until
cancelled
by the governmental unit or its agent.
(g) The choice of law for the obligations of a financial provider may be
made
for any state of these United States, but the law which shall apply to the
obligations of the governmental unit shall be the law of the State of Illinois,
and jurisdiction to enforce such credit agreement or remarketing agreement as
against the governmental unit shall be exclusively in the courts of the State
of
Illinois or in the applicable federal court having jurisdiction and located
within the State of Illinois.
(h) The governmental unit may not waive any sovereign immunities from time
to
time available under the laws of the State of Illinois as to jurisdiction,
procedures, and remedies, but any such credit agreement and remarketing
agreement shall otherwise by fully enforceable as valid and binding contracts
as
and to the extent provided by applicable law.
(i) Such credit agreement or remarketing agreement may provide for
acceleration
of the principal amounts due on the bonds, provided, however, that such
acceleration shall be deferred for not less than 18 months from the time any
such bond is acquired pursuant to any such agreement.
(Source: P.A. 93-9, eff. 6-3-03.)
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