Public Act 90-0480 of the 90th General Assembly
Public Act 90-0480
SB103 Enrolled LRB9000658PTcw
AN ACT to provide for supplemental procedures and
issuance of obligations in connection with the making of
local improvements through special assessments.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 1. Short Title. This Act may be cited as the
Special Assessment Supplemental Bond and Procedures Act.
Section 5. Finding. The General Assembly finds that: (a)
there have been many important changes in the financial
markets and practices with respect to the issuance of
obligations to provide funds for the payment of local
improvements to be paid from the imposition of special
assessments; (b) various provisions of Illinois law relating
to the making of local improvements and the provision for
payment of same through the imposition of special assessments
according to benefits are now outdated; (c) these outdated
provisions result in additional costs for the citizens of
the State of Illinois who are property owners and subject to
the payment of such special assessments; (d) the General
Assembly deems it advisable and in the best interest of such
property owners to provide supplemental authority regarding
the procedures for the making of local improvements and the
payment for same by special assessment and the issuance and
sale of obligations payable from such special assessments in
order to accommodate current and anticipated financial
markets and practices and the provisions of current federal
income tax law.
Section 10. Definitions. As used in this Act, unless the
context or usage clearly indicates otherwise:
"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.
"Governmental unit" means a county, township,
municipality, municipal corporation, unit of local
government, or a special district, by whatever name known,
authorized by any special assessment law to make local
improvements by special assessment.
"Special assessment bond" means any instrument evidencing
the obligation to pay money authorized or issued by or on
behalf of a governmental unit under a special assessment law
or under this Act, being payable from assessments made under
a special assessment law, and when applicable, as
supplemented by this Act.
"Special assessment law" means any law of the State of
Illinois authorizing governmental units to make local
improvements payable wholly or in part by special assessment,
and includes, without limitation, Division 2 of Article 9 of
the Illinois Municipal Code, Division 5-32 of Article 5 of
the Counties Code, Section 21 of the North Shore Sanitary
District Act, Section 19 of the Sanitary District Act of
1917, Sections 22a.1 through 22a.55 of the Sanitary District
Act of 1917, and Section 28 of the Sanitary District Act of
1936.
"Special assessment proceeding" means the proceeding by
any governmental unit under a special assessment law to
provide for the making of a specific local improvement by
special assessment.
"Special assessment ordinance" means an ordinance, or
when applicable a resolution, as provided for by any special
assessment law by which the governing body institutes, calls
for, or provides for the making of a local improvement to be
paid by the imposition of a special assessment pursuant to
such special assessment law.
"Supplemental Act Assessment Bonds" are those special
assessment bonds issued under Section 100 of this Act.
"Voucher" means any voucher issued under a special
assessment law for work done in connection with the making
of a local improvement.
Section 15. Supplemental powers; election. The provisions
of this Act are intended to be supplemental to 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. Any governmental unit may use the
provisions of this Act by making an election referring to
this Act in the special assessment ordinance. In addition,
a governmental unit may use the provisions of this Act that
relate exclusively to Supplemental Act Assessment Bonds by
making an election referring to this Act in any ordinance or
resolution passed subsequent to the special assessment
ordinance.
Section 20. Additional costs allowed. In addition to
and in excess of all costs otherwise permitted to be
assessed under any special assessment law in any special
assessment proceeding, the governing body may in the special
assessment ordinance provide for the following additional
amounts in the assessment:
(a) an additional reserve, not to exceed 10% of the
amount of the bonds issued pursuant to this Act, as a
reserve for the payment of interest on or principal of
bonds when due in the event of nonpayment of any
assessments; provided however, the interest earnings, if
any, on the additional reserve shall be applied to the
next installment as a partial reduction of payment due;
(b) an amount for the payment of interest upon
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
local improvement that is the subject of the special
assessment proceeding; and
(c) an amount for bond discount (the difference
between the face amount of a bond and the price at which
the bond is to be sold) not to exceed 4% of the total
cost of the improvement. The reserve provided for by
clause (a) of this Section shall be in addition to and
in excess of any other reserve otherwise permitted by
special assessment law including reserves for interest
deficiencies. Any additional cost or reserve to be
included by authority of this Section shall be expressly
provided for in the special assessment ordinance and
shall further be expressly stated in any engineer's
estimate of cost prepared in connection with a special
assessment ordinance as provided by a special assessment
law.
Section 25. Interest on assessments. The unpaid portion
of any assessment imposed under a special assessment
proceeding may bear interest at an interest rate or rates
not exceeding the rate or rates on bonds permitted by the
Bond Authorization Act; provided, however, that the time of
the adoption of the special assessment ordinance shall be
the date that the maximum rate or rates shall be calculated
rather than at the time the contract is made for the sale of
the bonds, as provided in the Bond Authorization Act.
Notwithstanding the foregoing provision, from and after the
due date of any installment of an assessment, the following
additional rates and charges may be imposed with respect to
the delinquent amount of such installment:
(a) an additional rate of interest of 1 1/2% per
month; and
(b) a collection charge of not to exceed 1% of the
amount of the delinquent installment.
Section 30. Amount and term of installments. An
assessment under a special assessment proceeding may be
payable in one or more installments coming due not more than
31 years after the date of the judgment order of final
confirmation of the assessment roll and report for such
special assessment proceeding. The first installment for
interest on such special assessment may be deferred for such
period of time during which interest upon bonds payable from
such special assessment has been provided for pursuant to the
provisions of Section 50 of this Act. Installments of
principal of a special assessment need not become due in
equal amounts, but rather, if provided for in the special
assessment ordinance, shall become due in the years and in
the amounts as shall be provided in the special assessment
ordinance. In the event that a governing body deems it
advisable to refund Supplemental Act Assessment Bonds in a
manner that would either increase installments or extend the
number of years in which installments may be payable, the
governing body may do so through a supplemental special
assessment ordinance and proceeding under applicable special
assessment law, provided the number of installments shall not
be increased so as to become due beyond the original maximum
term of 31 years provided in this Section. In the event such
a refunding does not increase installments or extend the
years in which payable, the governing body may refund
Supplemental Act Assessment Bonds through a supplemental
special assessment ordinance only.
Section 35. Notice of first installment and accrual of
interest. In lieu of the establishment of the date of the
first installment of a special assessment and the accrual of
interest on assessments by the issuance of a first voucher
and the filing of a certificate with the clerk of court or
other act as may be provided by a special assessment law,
either the governing body or the board of local improvements
may, at any time, after the judicial order of final
confirmation of the assessment roll and report, file with the
clerk of court in which the assessment was confirmed a notice
of the due date of the first installment and the date from
which interest shall accrue on the assessments. The notice
shall state the due date of the first installment, which
shall be not earlier than January 2 of the following year or
such later year as shall have been determined under Section
70 of this Act, and also the date upon which interest shall
begin to accrue on the assessments, which date shall be not
earlier than 60 days after the date the notice provided for
in this Section shall have been filed with the clerk of
court. In connection with the application of any special
assessment law, the notice shall be treated upon its filing
as if the notice were a certificate of first voucher or other
act as may be provided by a special assessment law, and all
procedures related to the filing of a certificate of first
voucher or such other act shall be deemed to have been
appropriately followed, subject only to the modifications to
such procedures provided for in this Act.
Section 40. Award of contract. In any special assessment
proceeding, upon the vote of two-thirds of the members of the
governing body then in office, the governing body or the
board of local improvements, as may be applicable, may award
a contract or contracts for the improvement pursuant to
negotiation with one or more persons, without the requirement
of competitive bidding.
Section 45. Bonds. In lieu of the issuance of vouchers
or bonds provided by a special assessment law, Supplemental
Act Assessment Bonds payable from the assessments made under
a special assessment proceeding may be issued under this
Section. Supplemental Act Assessment Bonds shall be issued
under the following terms and provisions:
(a) They shall be payable from the assessments made
under a special assessment proceeding and such other income
or revenues as may lawfully be pledged to the payment of such
bonds by a governmental unit.
(b) They may be issued in lieu of vouchers at any time on
or after the time when interest begins to run on the
assessments made under a special assessment proceeding.
(c) They may be issued in an amount not to exceed the
amount of the assessments confirmed in a special assessment
proceeding less the principal amount of any assessments
previously paid and less the principal amount of any vouchers
that may have previously been issued.
(d) They may bear interest at any rate or rates not to
exceed the rate or rates permitted by the Bond Authorization
Act; provided, however, that such rate or rates shall not
exceed the rate or rates provided for the unpaid installments
of the assessments made under the special assessment
proceeding.
(e) They may pay interest upon such date or dates either
annually, semi-annually, monthly, weekly, or otherwise.
(f) They may be subject to redemption with or without
premium upon such terms and provisions as may be provided by
the governing body, including, without limitation, terms as
to the order of redemption (numerical, pro-rata, by series,
or otherwise) and as to the timing thereof.
(g) They shall be negotiable instruments under Illinois
law.
(h) They may be made payable either serially or at term,
or any combination thereof, in such order of preference,
priority, lien position, or rank (including, without
limitation, numerical, pro-rata, by series, or otherwise) and
otherwise have any attributes permitted to bonds under the
Local Government Debt Reform Act, as the governing body may
provide.
Section 50. Alternative local procedure. Upon the request
of all of the owners of record to be subject to assessment in
a special assessment proceeding, the alternative procedure
for the proceeding set forth in this Section may be used. In
this alternative procedure, the board of local improvements
shall conduct all of the proceedings and perform all of the
acts otherwise performed by the court. There shall be no
right to jury trial or any reference to the rules of civil
procedure applicable to the court, but the board of local
improvements shall conduct its proceedings with due notice,
fairly and impartially. Determinations of the board of local
improvements shall be treated as the determination of an
administrative agency and shall be subject to appeal under
the same procedures as an appeal of an administrative
decision of an administrative agency under the Administrative
Review Law.
Section 55. County clerk may collect. Pursuant to the
Illinois constitutional and statutory provisions relating to
intergovernmental cooperation, the county clerk of any county
in which property subject to a special assessment is located
may, but shall not be required to, agree to mail bills for a
special assessment with the regular tax bills of the county,
or otherwise as may be provided by a special assessment law.
If the clerk agrees to mail such bills with the regular tax
bills, then the annual amount due as of January 2 shall
become due instead in even installments with each tax bill
made during the year in which such January 2 date occurs,
thus deferring to later date in the year the obligation to
pay the assessments.
Section 60. Recital. Supplemental Act Assessment Bonds
that are issued in part under this Act may contain a recital
to that effect and any such recital shall be conclusive as
against the governmental body thereof and any other person as
to the validity of the Supplemental Act Assessment Bonds and
as to their compliance with the provisions of this Act.
Section 70. The Statute on Statutes is amended by
changing Section 8 as follows:
(5 ILCS 70/8) (from Ch. 1, par. 1107)
Sec. 8. Omnibus Bond Acts.
(a) A citation to the Omnibus Bond Acts is a citation to
all of the following Acts, collectively, as amended from time
to time: the Bond Authorization Act, the Registered Bond
Act, the Municipal Bond Reform Act, the Local Government Debt
Reform Act, subsection (a) of Section 1-7 of the Property Tax
Extension Limitation Act, subsection (a) of Section 18-190 of
the Property Tax Code, the Uniform Facsimile Signature of
Public Officials Act, the Local Government Bond Validity Act,
the Illinois Development Finance Authority Act, the Public
Funds Investment Act, the Local Government Credit Enhancement
Act, the Local Government Defeasance of Debt Law, the
Intergovernmental Cooperation Act, the Local Government
Financial Planning and Supervision Act, the Special
Assessment Supplemental Bond and Procedure Act, and any
similar Act granting additional omnibus bond powers to
governmental entities generally, whether enacted before, on,
or after the effective date of this amendatory Act of 1989.
(b) The General Assembly recognizes that the
proliferation of governmental entities has resulted in the
enactment of hundreds of statutory provisions relating to the
borrowing and other powers of governmental entities. The
General Assembly addresses and has addressed problems common
to all such governmental entities so that they have equal
access to the municipal bond market. It has been, and will
continue to be, the intention of the General Assembly to
enact legislation applicable to governmental entities in an
omnibus fashion, as has been done in the provisions of the
Omnibus Bond Acts.
(c) It is and always has been the intention of the
General Assembly that the Omnibus Bond Acts are and always
have been supplementary grants of power, cumulative in nature
and in addition to any power or authority granted in any
other laws of the State. The Omnibus Bond Acts are
supplementary grants of power when applied in connection with
any similar grant of power or limitation contained in any
other law of the State, whether or not the other law is
enacted or amended after an Omnibus Bond Act or appears to be
more restrictive than an Omnibus Bond Act, unless the General
Assembly expressly declares in such other law that a
specifically named Omnibus Bond Act does not apply.
(d) All instruments providing for the payment of money
executed by or on behalf of any governmental entity organized
by or under the laws of this State, including without
limitation the State, to carry out a public governmental or
proprietary function, acting through its corporate
authorities, or which any governmental entity has assumed or
agreed to pay, which were:
(1) issued or authorized to be issued by
proceedings adopted by such corporate authorities before
the effective date of this amendatory Act of 1989;
(2) issued or authorized to be issued in accordance
with the procedures set forth in or pursuant to any
authorization contained in any of the Omnibus Bond Acts;
and
(3) issued or authorized to be issued for any
purpose authorized by the laws of this State,
are valid and legally binding obligations of the governmental
entity issuing such instruments, payable in accordance with
their terms.
(Source: P.A. 87-17; 88-670, eff. 12-2-94.)
Section 75. The Illinois Municipal Code is amended by
changing Section 9-2-9 as follows:
(65 ILCS 5/9-2-9) (from Ch. 24, par. 9-2-9)
Sec. 9-2-9. Preliminary procedure for local improvements
by special assessment. All ordinances for local improvements
to be paid for wholly or in part by special assessment or
special taxation shall originate with the board of local
improvements. Petitions for any local improvement shall be
addressed to that board. The board may originate a scheme for
any local improvement to be paid for by special assessment or
special tax, either with or without a petition, and in either
case shall adopt a resolution describing the proposed
improvement. This resolution may provide that specifications
for the proposed improvement be made part of the resolution
by reference to specifications previously adopted by
resolution by the municipality, or to specifications adopted
or published by the State of Illinois or a political
subdivision thereof, provided that a copy of the
specifications so adopted by reference is on file in the
office of the clerk of the municipality. This resolution
shall be at once transcribed into the records of the board.
The proposed local improvement may consist of the
construction of street, storm drain sewer, water main, or
sanitary sewer improvements and appurtenances, or any
combination thereof, in a local contiguous area pursuant to a
single special assessment project, provided that in assessing
each lot, block, tract, and parcel of property, the
commissioner so assessing shall take into consideration
whether each lot, block, tract, or parcel is benefited by all
or only some of the improvements combined into the single
special assessment project. For purposes hereof, a local
contiguous area shall be defined as an area in which all of
the lots, blocks, tracts, or parcels located within the
boundaries thereof will be benefited by one or more of the
proposed improvements. The fact that more than one
improvement is being constructed as part of a single special
assessment project shall not be grounds for an objection by
an assessee to the special assessment proceeding in court.
Whenever the proposed improvement requires that private
or public property be taken or damaged, the resolution shall
describe the property proposed to be taken or damaged for
that purpose. The board, by the same resolution, shall fix a
day and hour for a public hearing thereon. The hearing shall
not be less than 10 days after the adoption of the
resolution. The board shall also have an estimate of the cost
of the improvement (omitting land to be acquired) made in
writing by the engineer of the board, (if there is an
engineer, if not, then by the president) over his signature.
This estimate shall be itemized to the satisfaction of the
board and shall be made a part of the record of the
resolution. However, such an estimate is not required in
municipalities having a population of 100,000 or more when
the proposed improvement consists only of taking or damaging
private or public property. And in cities and villages which
have adopted prior to the effective date of this Code or
which after the effective date of this Code adopt the
commission form of municipal government, the estimate of the
cost of the improvement, (omitting land to be acquired),
shall be made in writing by the public engineer if there is
one, of the city or village, if not, then by the mayor or
president of the city or village.
Notice of the time and place of the public hearing shall
be sent by mail directed to the person who paid the general
taxes for the last preceding year on each lot, block, tract,
or parcel of land fronting on the proposed improvement not
less than 5 days prior to the time set for the public
hearing. These notices shall contain (1) the substance of the
resolution adopted by the board, (2) when an estimate is
required by this Division 2 the estimate of the cost of the
proposed improvement, and (3) a notification that the extent,
nature, kind, character, and (when an estimate is required by
this article) the estimated cost of the proposed improvement
may be changed by the board at the public hearing thereon. If
upon the hearing the board deems the proposed improvement
desirable, it shall adopt a resolution and prepare and submit
an ordinance therefor. But in proceedings only for the
laying, building, constructing, or renewing of any sidewalk,
water service pipe, or house drain, no resolution, public
hearing, or preliminary proceedings leading up to the same
are necessary. In such proceedings the board may submit to
the corporate authorities an ordinance, together with its
recommendation and (when an estimate is required) the
estimated cost of the improvement, as made by the engineer.
Such proceedings shall have the same effect as though a
public hearing had been held thereon.
In the event that a local improvement is to be
constructed with the assistance of any agency of the Federal
government, or other governmental agency, the resolution of
the board of local improvements shall set forth that fact and
the estimate of cost shall set forth and indicate, in dollars
and cents, the estimated amount of assistance to be so
provided.
(Source: Laws 1963, p. 2425.)
Section 99. Effective date. This Act takes effect upon
becoming law.