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90_SB0185
30 ILCS 350/15 from Ch. 17, par. 6915
Amends the Local Government Debt Reform Act. Provides
that alternate bonds shall be payable from property taxes
only when all other sources of payment have been exhausted.
Deletes provision stating that alternate bonds remain until
paid or defeased the general obligation of the governmental
unit, and shall be paid from the levy of taxes used to pay
for general obligations. Effective immediately.
SRS90S0019NCsa
SRS90S0019NCsa
1 AN ACT in relation to taxes, amending named Acts.
2 Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
4 Section 5. The Local Government Debt Reform Act is
5 amended by changing Section 15 as follows:
6 (30 ILCS 350/15) (from Ch. 17, par. 6915)
7 Sec. 15. Double-barrelled bonds. Whenever revenue bonds
8 have been authorized to be issued pursuant to applicable law
9 or whenever there exists for a governmental unit a revenue
10 source, the procedures set forth in this Section may be used
11 by a governing body. General obligation bonds may be issued
12 in lieu of such revenue bonds as authorized, and general
13 obligation bonds may be issued payable from any revenue
14 source; provided, however, that in no event shall property
15 taxes be the sole or primary revenue source. Such general
16 obligation bonds may be referred to as "alternate bonds".
17 Alternate bonds may be issued without any referendum or
18 backdoor referendum except as provided in this Section, upon
19 the terms provided in Section 10 of this Act without
20 reference to other provisions of law, but only upon the
21 conditions provided in this Section. Alternate bonds shall
22 not be regarded as or included in any computation of
23 indebtedness for the purpose of any statutory provision or
24 limitation except as expressly provided in this Section.
25 Such conditions are: (a) Alternate bonds shall be issued
26 for a lawful corporate purpose. If issued in lieu of revenue
27 bonds, alternate bonds shall be issued for the purposes for
28 which such revenue bonds shall have been authorized. If
29 issued payable from a revenue source in the manner
30 hereinafter provided, which revenue source is limited in its
31 purposes or applications, then the alternate bonds shall be
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1 issued only for such limited purposes or applications.
2 Alternate bonds may be issued payable from either enterprise
3 revenues or revenue sources, or both. Notwithstanding any
4 other provision to the contrary, alternate bonds shall be
5 payable from property taxes only when all other revenue
6 sources have been exhausted.
7 (b) Alternate bonds shall be subject to backdoor
8 referendum. The provisions of Section 5 of this Act shall
9 apply to such backdoor referendum, together with the
10 provisions hereof. The authorizing ordinance shall be
11 published in a newspaper of general circulation in the
12 governmental unit. Along with or as part of the authorizing
13 ordinance, there shall be published a notice of (1) the
14 specific number of voters required to sign a petition
15 requesting that the issuance of the alternate bonds be
16 submitted to referendum, (2) the time when such petition must
17 be filed, (3) the date of the prospective referendum, and
18 (4), with respect to authorizing ordinances adopted on or
19 after January 1, 1991, a statement that identifies any
20 revenue source that will be used to pay the principal of and
21 interest on the alternate bonds. The clerk or secretary of
22 the governmental unit shall make a petition form available to
23 anyone requesting one. If no petition is filed with the
24 clerk or secretary within 30 days of publication of the
25 authorizing ordinance and notice, the alternate bonds shall
26 be authorized to be issued. But if within this 30 days
27 period, a petition is filed with such clerk or secretary
28 signed by electors numbering the greater of (i) 7.5% of the
29 registered voters in the governmental unit or (ii) 200 of
30 those registered voters or 15% of those registered voters,
31 whichever is less, asking that the issuance of such alternate
32 bonds be submitted to referendum, the clerk or secretary
33 shall certify such question for submission at an election
34 held in accordance with the general election law. The
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1 question on the ballot shall include a statement of any
2 revenue source that will be used to pay the principal of and
3 interest on the alternate bonds. The alternate bonds shall be
4 authorized to be issued if a majority of the votes cast on
5 the question at such election are in favor thereof. Backdoor
6 referendum proceedings for bonds and alternate bonds to be
7 issued in lieu of such bonds may be conducted at the same
8 time.
9 (c) To the extent payable from enterprise revenues, such
10 revenues shall have been determined by the governing body to
11 be sufficient to provide for or pay in each year to final
12 maturity of such alternate bonds all of the following: (1)
13 costs of operation and maintenance of the utility or
14 enterprise, but not including depreciation, (2) debt service
15 on all outstanding revenue bonds payable from such enterprise
16 revenues, (3) all amounts required to meet any fund or
17 account requirements with respect to such outstanding revenue
18 bonds, (4) other contractual or tort liability obligations,
19 if any, payable from such enterprise revenues, and (5) in
20 each year, an amount not less than 1.25 times debt service of
21 all (i) alternate bonds payable from such enterprise revenues
22 previously issued and outstanding and (ii) alternate bonds
23 proposed to be issued. To the extent payable from one or
24 more revenue sources, such sources shall have been determined
25 by the governing body to provide in each year, an amount not
26 less than 1.25 times debt service of all alternate bonds
27 payable from such revenue sources previously issued and
28 outstanding and alternate bonds proposed to be issued. The
29 conditions enumerated in this subsection (c) need not be met
30 for that amount of debt service provided for by the setting
31 aside of proceeds of bonds or other moneys at the time of the
32 delivery of such bonds.
33 (d) The determination of the sufficiency of enterprise
34 revenues or a revenue source, as applicable, shall be
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1 supported by reference to the most recent audit of the
2 governmental unit, which shall be for a fiscal year ending
3 not earlier than 18 months previous to the time of issuance
4 of the alternate bonds. If such audit does not adequately
5 show such enterprise revenues or revenue source, as
6 applicable, or if such enterprise revenues or revenue source,
7 as applicable, are shown to be insufficient, then the
8 determination of sufficiency shall be supported by the report
9 of an independent accountant or feasibility analyst having a
10 national reputation for expertise in such matters,
11 demonstrating the sufficiency of such revenues and
12 explaining, if appropriate, by what means the revenues will
13 be greater than as shown in the audit. Whenever such
14 sufficiency is demonstrated by reference to a schedule of
15 higher rates or charges for enterprise revenues or a higher
16 tax imposition for a revenue source, such higher rates,
17 charges or taxes shall have been properly imposed by an
18 ordinance adopted prior to the time of delivery of alternate
19 bonds. The reference to and acceptance of an audit or
20 report, as the case may be, and the determination of the
21 governing body as to sufficiency of enterprise revenues or a
22 revenue source shall be conclusive evidence that the
23 conditions of this Section have been met and that the
24 alternate bonds are valid.
25 (e) The enterprise revenues or revenue source, as
26 applicable, shall be in fact pledged to the payment of the
27 alternate bonds; and the governing body shall covenant, to
28 the extent it is empowered to do so, to provide for, collect
29 and apply such enterprise revenues or revenue source, as
30 applicable, to the payment of the alternate bonds and the
31 provision of not less than an additional .25 times debt
32 service. The pledge and establishment of rates or charges
33 for enterprise revenues, or the imposition of taxes in a
34 given rate or amount, as provided in this Section for
-5- SRS90S0019NCsa
1 alternate bonds, shall constitute a continuing obligation of
2 the governmental unit with respect to such establishment or
3 imposition and a continuing appropriation of the amounts
4 received. All covenants relating to alternate bonds and the
5 conditions and obligations imposed by this Section are
6 enforceable by any bondholder of alternate bonds affected,
7 any taxpayer of the governmental unit, and the People of the
8 State of Illinois acting through the Attorney General or any
9 designee, and in the event that any such action results in an
10 order finding that the governmental unit has not properly set
11 rates or charges or imposed taxes to the extent it is
12 empowered to do so or collected and applied enterprise
13 revenues or any revenue source, as applicable, as required by
14 this Act, the plaintiff in any such action shall be awarded
15 reasonable attorney's fees. The intent is that such
16 enterprise revenues or revenue source, as applicable, shall
17 be sufficient and shall be applied to the payment of debt
18 service on such alternate bonds so that taxes need not be
19 levied, or if levied need not be extended, for such payment.
20 Nothing in this Section shall inhibit or restrict the
21 authority of a governing body to determine the lien priority
22 of any bonds, including alternate bonds, which may be issued
23 with respect to any enterprise revenues or revenue source.
24 In the event that alternate bonds shall have been issued
25 and taxes, other than a designated revenue source, shall have
26 been extended pursuant to the general obligation, full faith
27 and credit promise supporting such alternate bonds, then the
28 amount of such alternate bonds then outstanding shall be
29 included in the computation of indebtedness of the
30 governmental unit for purposes of all statutory provisions or
31 limitations until such time as an audit of the governmental
32 unit shall show that the alternate bonds have been paid from
33 the enterprise revenues or revenue source, as applicable,
34 pledged thereto for a complete fiscal year.
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1 Alternate bonds may be issued to refund or advance refund
2 alternate bonds without meeting any of the conditions set
3 forth in this Section, except that the term of the refunding
4 bonds shall not be longer than the term of the refunded bonds
5 and that the debt service payable in any year on the
6 refunding bonds shall not exceed the debt service payable in
7 such year on the refunded bonds.
8 Once issued, alternate bonds shall be and forever
9 remain until paid or defeased the general obligation of the
10 governmental unit, for the payment of which its full faith
11 and credit are pledged, and shall be payable from the levy of
12 taxes as is provided in this Act for general obligation
13 bonds.
14 The changes made by this amendatory Act of 1990 do not
15 affect the validity of bonds authorized before September 1,
16 1990.
17 (Source: P.A. 85-1419; 86-1179.)
18 Section 99. Effective date. This Act takes effect upon
19 becoming law.