HB1458 95TH GENERAL ASSEMBLY

LRB095 10071 BDD 30285 b

95TH GENERAL ASSEMBLY
State of Illinois
2007 and 2008
HB1458

Introduced 2/21/2007, by Rep. George Scully, Jr.

SYNOPSIS AS INTRODUCED:

20 ILCS 3501/801-1
20 ILCS 3501/801-10
20 ILCS 3501/801-40
20 ILCS 3501/825-60
20 ILCS 3501/825-65
20 ILCS 3501/830-25
20 ILCS 3501/Art. 850 heading new
20 ILCS 3501/850-5 new
20 ILCS 3501/850-10 new
20 ILCS 3501/850-15 new
20 ILCS 3501/850-20 new
20 ILCS 3501/850-25 new
20 ILCS 3501/850-30 new
20 ILCS 3501/850-35 new
20 ILCS 3501/850-40 new
20 ILCS 3501/850-45 new

Amends the Illinois Finance Authority Act. Authorizes the Illinois Finance Authority to issue bonds and to guarantee loans to finance broadband projects in the State. Sets forth the powers of the Authority with respect to broadband financing. Sets forth requirements for State guarantees of broadband financing. Requires monetary transfers and continuing appropriations to funds of the Authority for broadband financing purposes. Provides that bonds for broadband financing may be moral obligations of the State. Provides that the exercise of powers of the Authority under these provisions is exempt from certain State taxation. Makes other changes. Effective immediately.

FISCAL NOTE ACT MAY APPLY

STATE DEBT IMPACT NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning finance.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Illinois Finance Authority Act is amended by changing Sections 801-1, 801-10, 801-40, 825-60, 825-65, and 830-25 and by adding Article 850 as follows:

(20 ILCS 3501/801-1)

Sec. 801-1. Short Title. Articles 801 80 through 850 845 of this Act may be cited as the Illinois Finance Authority Act. References to "this Act" in Articles 801 through 850 845 are references to the Illinois Finance Authority Act.

(Source: P.A. 93-205, eff. 1-1-04; revised 9-16-03.)

(20 ILCS 3501/801-10)

Sec. 801-10. Definitions. The following terms, whenever used or referred to in this Act, shall have the following meanings, except in such instances where the context may clearly indicate otherwise:

(a) The term "Authority" means the Illinois Finance Authority created by this Act.

(b) The term "project" means an industrial project, housing project, public purpose project, higher education project, health facility project, cultural institution project, agricultural facility or agribusiness, broadband project (as defined under Section 850-10), and "project" may include any combination of one or more of the foregoing undertaken jointly by any person with one or more other persons.

(c) The term "public purpose project" means any project or facility including without limitation land, buildings, structures, machinery, equipment and all other real and personal property, which is authorized or required by law to be acquired, constructed, improved, rehabilitated, reconstructed, replaced or maintained by any unit of government or any other lawful public purpose which is authorized or required by law to be undertaken by any unit of government.

(d) The term "industrial project" means the acquisition, construction, refurbishment, creation, development or redevelopment of any facility, equipment, machinery, real property or personal property for use by any instrumentality of the State or its political subdivisions, for use by any person or institution, public or private, for profit or not for profit, or for use in any trade or business including, but not limited to, any industrial, manufacturing or commercial enterprise and which is (1) a capital project including but not limited to: (i) land and any rights therein, one or more buildings, structures or other improvements, machinery and equipment, whether now existing or hereafter acquired, and whether or not located on the same site or sites; (ii) all appurtenances and facilities incidental to the foregoing, including, but not limited to utilities, access roads, railroad sidings, track, docking and similar facilities, parking facilities, dockage, wharfage, railroad roadbed, track, trestle, depot, terminal, switching and signaling or related equipment, site preparation and landscaping; and (iii) all non-capital costs and expenses relating thereto or (2) any addition to, renovation, rehabilitation or improvement of a capital project or (3) any activity or undertaking which the Authority determines will aid, assist or encourage economic growth, development or redevelopment within the State or any area thereof, will promote the expansion, retention or diversification of employment opportunities within the State or any area thereof or will aid in stabilizing or developing any industry or economic sector of the State economy. The term "industrial project" also means the production of motion pictures.

(e) The term "bond" or "bonds" shall include bonds, notes (including bond, grant or revenue anticipation notes), certificates and/or other evidences of indebtedness representing an obligation to pay money, including refunding bonds.

(f) The terms "lease agreement" and "loan agreement" shall mean: (i) an agreement whereby a project acquired by the Authority by purchase, gift or lease is leased to any person, corporation or unit of local government which will use or cause the project to be used as a project as heretofore defined upon terms providing for lease rental payments at least sufficient to pay when due all principal of, interest and premium, if any, on any bonds of the Authority issued with respect to such project, providing for the maintenance, insuring and operation of the project on terms satisfactory to the Authority, providing for disposition of the project upon termination of the lease term, including purchase options or abandonment of the premises, and such other terms as may be deemed desirable by the Authority, or (ii) any agreement pursuant to which the Authority agrees to loan the proceeds of its bonds issued with respect to a project or other funds of the Authority to any person which will use or cause the project to be used as a project as heretofore defined upon terms providing for loan repayment installments at least sufficient to pay when due all principal of, interest and premium, if any, on any bonds of the Authority, if any, issued with respect to the project, and providing for maintenance, insurance and other matters as may be deemed desirable by the Authority.

(g) The term "financial aid" means the expenditure of Authority funds or funds provided by the Authority through the issuance of its bonds, notes or other evidences of indebtedness or from other sources for the development, construction, acquisition or improvement of a project.

(h) The term "person" means an individual, corporation, unit of government, business trust, estate, trust, partnership or association, 2 or more persons having a joint or common interest, or any other legal entity.

(i) The term "unit of government" means the federal government, the State or unit of local government, a school district, or any agency or instrumentality, office, officer, department, division, bureau, commission, college or university thereof.

(j) The term "health facility" means: (a) any public or private institution, place, building, or agency required to be licensed under the Hospital Licensing Act; (b) any public or private institution, place, building, or agency required to be licensed under the Nursing Home Care Act; (c) any public or licensed private hospital as defined in the Mental Health and Developmental Disabilities Code; (d) any such facility exempted from such licensure when the Director of Public Health attests that such exempted facility meets the statutory definition of a facility subject to licensure; (e) any other public or private health service institution, place, building, or agency which the Director of Public Health attests is subject to certification by the Secretary, U.S. Department of Health and Human Services under the Social Security Act, as now or hereafter amended, or which the Director of Public Health attests is subject to standard-setting by a recognized public or voluntary accrediting or standard-setting agency; (f) any public or private institution, place, building or agency engaged in providing one or more supporting services to a health facility; (g) any public or private institution, place, building or agency engaged in providing training in the healing arts, including but not limited to schools of medicine, dentistry, osteopathy, optometry, podiatry, pharmacy or nursing, schools for the training of x-ray, laboratory or other health care technicians and schools for the training of para-professionals in the health care field; (h) any public or private congregate, life or extended care or elderly housing facility or any public or private home for the aged or infirm, including, without limitation, any Facility as defined in the Life Care Facilities Act; (i) any public or private mental, emotional or physical rehabilitation facility or any public or private educational, counseling, or rehabilitation facility or home, for those persons with a developmental disability, those who are physically ill or disabled, the emotionally disturbed, those persons with a mental illness or persons with learning or similar disabilities or problems; (j) any public or private alcohol, drug or substance abuse diagnosis, counseling treatment or rehabilitation facility, (k) any public or private institution, place, building or agency licensed by the Department of Children and Family Services or which is not so licensed but which the Director of Children and Family Services attests provides child care, child welfare or other services of the type provided by facilities subject to such licensure; (l) any public or private adoption agency or facility; and (m) any public or private blood bank or blood center. "Health facility" also means a public or private structure or structures suitable primarily for use as a laboratory, laundry, nurses or interns residence or other housing or hotel facility used in whole or in part for staff, employees or students and their families, patients or relatives of patients admitted for treatment or care in a health facility, or persons conducting business with a health facility, physician's facility, surgicenter, administration building, research facility, maintenance, storage or utility facility and all structures or facilities related to any of the foregoing or required or useful for the operation of a health facility, including parking or other facilities or other supporting service structures required or useful for the orderly conduct of such health facility.

(k) The term "participating health institution" means a private corporation or association or public entity of this State, authorized by the laws of this State to provide or operate a health facility as defined in this Act and which, pursuant to the provisions of this Act, undertakes the financing, construction or acquisition of a project or undertakes the refunding or refinancing of obligations, loans, indebtedness or advances as provided in this Act.

(l) The term "health facility project", means a specific health facility work or improvement to be financed or refinanced (including without limitation through reimbursement of prior expenditures), acquired, constructed, enlarged, remodeled, renovated, improved, furnished, or equipped, with funds provided in whole or in part hereunder, any accounts receivable, working capital, liability or insurance cost or operating expense financing or refinancing program of a health facility with or involving funds provided in whole or in part hereunder, or any combination thereof.

(m) The term "bond resolution" means the resolution or resolutions authorizing the issuance of, or providing terms and conditions related to, bonds issued under this Act and includes, where appropriate, any trust agreement, trust indenture, indenture of mortgage or deed of trust providing terms and conditions for such bonds.

(n) The term "property" means any real, personal or mixed property, whether tangible or intangible, or any interest therein, including, without limitation, any real estate, leasehold interests, appurtenances, buildings, easements, equipment, furnishings, furniture, improvements, machinery, rights of way, structures, accounts, contract rights or any interest therein.

(o) The term "revenues" means, with respect to any project, the rents, fees, charges, interest, principal repayments, collections and other income or profit derived therefrom.

(p) The term "higher education project" means, in the case of a private institution of higher education, an educational facility to be acquired, constructed, enlarged, remodeled, renovated, improved, furnished, or equipped, or any combination thereof.

(q) The term "cultural institution project" means, in the case of a cultural institution, a cultural facility to be acquired, constructed, enlarged, remodeled, renovated, improved, furnished, or equipped, or any combination thereof.

(r) The term "educational facility" means any property located within the State constructed or acquired before or after the effective date of this Act, which is or will be, in whole or in part, suitable for the instruction, feeding, recreation or housing of students, the conducting of research or other work of a private institution of higher education, the use by a private institution of higher education in connection with any educational, research or related or incidental activities then being or to be conducted by it, or any combination of the foregoing, including, without limitation, any such property suitable for use as or in connection with any one or more of the following: an academic facility, administrative facility, agricultural facility, assembly hall, athletic facility, auditorium, boating facility, campus, communication facility, computer facility, continuing education facility, classroom, dining hall, dormitory, exhibition hall, fire fighting facility, fire prevention facility, food service and preparation facility, gymnasium, greenhouse, health care facility, hospital, housing, instructional facility, laboratory, library, maintenance facility, medical facility, museum, offices, parking area, physical education facility, recreational facility, research facility, stadium, storage facility, student union, study facility, theatre or utility.

(s) The term "cultural facility" means any property located within the State constructed or acquired before or after the effective date of this Act, which is or will be, in whole or in part, suitable for the particular purposes or needs of a cultural institution, including, without limitation, any such property suitable for use as or in connection with any one or more of the following: an administrative facility, aquarium, assembly hall, auditorium, botanical garden, exhibition hall, gallery, greenhouse, library, museum, scientific laboratory, theater or zoological facility, and shall also include, without limitation, books, works of art or music, animal, plant or aquatic life or other items for display, exhibition or performance. The term "cultural facility" includes buildings on the National Register of Historic Places which are owned or operated by nonprofit entities.

(t) "Private institution of higher education" means a not-for-profit educational institution which is not owned by the State or any political subdivision, agency, instrumentality, district or municipality thereof, which is authorized by law to provide a program of education beyond the high school level and which:

(1) Admits as regular students only individuals having a certificate of graduation from a high school, or the recognized equivalent of such a certificate;

(2) Provides an educational program for which it awards a bachelor's degree, or provides an educational program, admission into which is conditioned upon the prior attainment of a bachelor's degree or its equivalent, for which it awards a postgraduate degree, or provides not less than a 2-year program which is acceptable for full credit toward such a degree, or offers a 2-year program in engineering, mathematics, or the physical or biological sciences which is designed to prepare the student to work as a technician and at a semiprofessional level in engineering, scientific, or other technological fields which require the understanding and application of basic engineering, scientific, or mathematical principles or knowledge;

(3) Is accredited by a nationally recognized accrediting agency or association or, if not so accredited, is an institution whose credits are accepted, on transfer, by not less than 3 institutions which are so accredited, for credit on the same basis as if transferred from an institution so accredited, and holds an unrevoked certificate of approval under the Private College Act from the Board of Higher Education, or is qualified as a "degree granting institution" under the Academic Degree Act; and

(4) Does not discriminate in the admission of students on the basis of race or color. "Private institution of higher education" also includes any "academic institution".

(u) The term "academic institution" means any not-for-profit institution which is not owned by the State or any political subdivision, agency, instrumentality, district or municipality thereof, which institution engages in, or facilitates academic, scientific, educational or professional research or learning in a field or fields of study taught at a private institution of higher education. Academic institutions include, without limitation, libraries, archives, academic, scientific, educational or professional societies, institutions, associations or foundations having such purposes.

(v) The term "cultural institution" means any not-for-profit institution which is not owned by the State or any political subdivision, agency, instrumentality, district or municipality thereof, which institution engages in the cultural, intellectual, scientific, educational or artistic enrichment of the people of the State. Cultural institutions include, without limitation, aquaria, botanical societies, historical societies, libraries, museums, performing arts associations or societies, scientific societies and zoological societies.

(w) The term "affiliate" means, with respect to financing of an agricultural facility or an agribusiness, any lender, any person, firm or corporation controlled by, or under common control with, such lender, and any person, firm or corporation controlling such lender.

(x) The term "agricultural facility" means land, any building or other improvement thereon or thereto, and any personal properties deemed necessary or suitable for use, whether or not now in existence, in farming, ranching, the production of agricultural commodities (including, without limitation, the products of aquaculture, hydroponics and silviculture) or the treating, processing or storing of such agricultural commodities when such activities are customarily engaged in by farmers as a part of farming.

(y) The term "lender" with respect to financing of an agricultural facility or an agribusiness, means any federal or State chartered bank, Federal Land Bank, Production Credit Association, Bank for Cooperatives, federal or State chartered savings and loan association or building and loan association, Small Business Investment Company or any other institution qualified within this State to originate and service loans, including, but without limitation to, insurance companies, credit unions and mortgage loan companies. "Lender" also means a wholly owned subsidiary of a manufacturer, seller or distributor of goods or services that makes loans to businesses or individuals, commonly known as a "captive finance company".

(z) The term "agribusiness" means any sole proprietorship, limited partnership, co-partnership, joint venture, corporation or cooperative which operates or will operate a facility located within the State of Illinois that is related to the processing of agricultural commodities (including, without limitation, the products of aquaculture, hydroponics and silviculture) or the manufacturing, production or construction of agricultural buildings, structures, equipment, implements, and supplies, or any other facilities or processes used in agricultural production. Agribusiness includes but is not limited to the following:

(1) grain handling and processing, including grain storage, drying, treatment, conditioning, mailing and packaging;

(2) seed and feed grain development and processing;

(3) fruit and vegetable processing, including preparation, canning and packaging;

(4) processing of livestock and livestock products, dairy products, poultry and poultry products, fish or apiarian products, including slaughter, shearing, collecting, preparation, canning and packaging;

(5) fertilizer and agricultural chemical manufacturing, processing, application and supplying;

(6) farm machinery, equipment and implement manufacturing and supplying;

(7) manufacturing and supplying of agricultural commodity processing machinery and equipment, including machinery and equipment used in slaughter, treatment, handling, collecting, preparation, canning or packaging of agricultural commodities;

(8) farm building and farm structure manufacturing, construction and supplying;

(9) construction, manufacturing, implementation, supplying or servicing of irrigation, drainage and soil and water conservation devices or equipment;

(10) fuel processing and development facilities that produce fuel from agricultural commodities or byproducts;

(11) facilities and equipment for processing and packaging agricultural commodities specifically for export;

(12) facilities and equipment for forestry product processing and supplying, including sawmilling operations, wood chip operations, timber harvesting operations, and manufacturing of prefabricated buildings, paper, furniture or other goods from forestry products;

(13) facilities and equipment for research and development of products, processes and equipment for the production, processing, preparation or packaging of agricultural commodities and byproducts.

(aa) The term "asset" with respect to financing of any agricultural facility or any agribusiness, means, but is not limited to the following: cash crops or feed on hand; livestock held for sale; breeding stock; marketable bonds and securities; securities not readily marketable; accounts receivable; notes receivable; cash invested in growing crops; net cash value of life insurance; machinery and equipment; cars and trucks; farm and other real estate including life estates and personal residence; value of beneficial interests in trusts; government payments or grants; and any other assets.

(bb) The term "liability" with respect to financing of any agricultural facility or any agribusiness shall include, but not be limited to the following: accounts payable; notes or other indebtedness owed to any source; taxes; rent; amounts owed on real estate contracts or real estate mortgages; judgments; accrued interest payable; and any other liability.

(cc) The term "Predecessor Authorities" means those authorities as described in Section 845-75.

(dd) The term "housing project" means a specific work or improvement undertaken to provide residential dwelling accommodations, including the acquisition, construction or rehabilitation of lands, buildings and community facilities and in connection therewith to provide nonhousing facilities which are part of the housing project, including land, buildings, improvements, equipment and all ancillary facilities for use for offices, stores, retirement homes, hotels, financial institutions, service, health care, education, recreation or research establishments, or any other commercial purpose which are or are to be related to a housing development.

(Source: P.A. 93-205, eff. 1-1-04; 93-1101, eff. 3-31-05.)

(20 ILCS 3501/801-40)

Sec. 801-40. In addition to the powers otherwise authorized by law and in addition to the foregoing general corporate powers, the Authority shall also have the following additional specific powers to be exercised in furtherance of the purposes of this Act.

(a) The Authority shall have power (i) to accept grants, loans or appropriations from the federal government or the State, or any agency or instrumentality thereof, to be used for the operating expenses of the Authority, or for any purposes of the Authority, including the making of direct loans of such funds with respect to projects, and (ii) to enter into any agreement with the federal government or the State, or any agency or instrumentality thereof, in relationship to such grants, loans or appropriations.

(b) The Authority shall have power to procure and enter into contracts for any type of insurance and indemnity agreements covering loss or damage to property from any cause, including loss of use and occupancy, or covering any other insurable risk.

(c) The Authority shall have the continuing power to issue bonds for its corporate purposes. Bonds may be issued by the Authority in one or more series and may provide for the payment of any interest deemed necessary on such bonds, of the costs of issuance of such bonds, of any premium on any insurance, or of the cost of any guarantees, letters of credit or other similar documents, may provide for the funding of the reserves deemed necessary in connection with such bonds, and may provide for the refunding or advance refunding of any bonds or for accounts deemed necessary in connection with any purpose of the Authority. The bonds may bear interest payable at any time or times and at any rate or rates, notwithstanding any other provision of law to the contrary, and such rate or rates may be established by an index or formula which may be implemented or established by persons appointed or retained therefor by the Authority, or may bear no interest or may bear interest payable at maturity or upon redemption prior to maturity, may bear such date or dates, may be payable at such time or times and at such place or places, may mature at any time or times not later than 40 years from the date of issuance, may be sold at public or private sale at such time or times and at such price or prices, may be secured by such pledges, reserves, guarantees, letters of credit, insurance contracts or other similar credit support or liquidity instruments, may be executed in such manner, may be subject to redemption prior to maturity, may provide for the registration of the bonds, and may be subject to such other terms and conditions all as may be provided by the resolution or indenture authorizing the issuance of such bonds. The holder or holders of any bonds issued by the Authority may bring suits at law or proceedings in equity to compel the performance and observance by any person or by the Authority or any of its agents or employees of any contract or covenant made with the holders of such bonds and to compel such person or the Authority and any of its agents or employees to perform any duties required to be performed for the benefit of the holders of any such bonds by the provision of the resolution authorizing their issuance, and to enjoin such person or the Authority and any of its agents or employees from taking any action in conflict with any such contract or covenant. Notwithstanding the form and tenor of any such bonds and in the absence of any express recital on the face thereof that it is non-negotiable, all such bonds shall be negotiable instruments. Pending the preparation and execution of any such bonds, temporary bonds may be issued as provided by the resolution. The bonds shall be sold by the Authority in such manner as it shall determine. The bonds may be secured as provided in the authorizing resolution by the receipts, revenues, income and other available funds of the Authority and by any amounts derived by the Authority from the loan agreement or lease agreement with respect to the project or projects; and bonds may be issued as general obligations of the Authority payable from such revenues, funds and obligations of the Authority as the bond resolution shall provide, or may be issued as limited obligations with a claim for payment solely from such revenues, funds and obligations as the bond resolution shall provide. The Authority may grant a specific pledge or assignment of and lien on or security interest in such rights, revenues, income, or amounts and may grant a specific pledge or assignment of and lien on or security interest in any reserves, funds or accounts established in the resolution authorizing the issuance of bonds. Any such pledge, assignment, lien or security interest for the benefit of the holders of the Authority's bonds shall be valid and binding from the time the bonds are issued without any physical delivery or further act, and shall be valid and binding as against and prior to the claims of all other parties having claims against the Authority or any other person irrespective of whether the other parties have notice of the pledge, assignment, lien or security interest. As evidence of such pledge, assignment, lien and security interest, the Authority may execute and deliver a mortgage, trust agreement, indenture or security agreement or an assignment thereof. A remedy for any breach or default of the terms of any such agreement by the Authority may be by mandamus proceedings in any court of competent jurisdiction to compel the performance and compliance therewith, but the agreement may prescribe by whom or on whose behalf such action may be instituted. It is expressly understood that the Authority may, but need not, acquire title to any project with respect to which it exercises its authority.

(d) With respect to the powers granted by this Act, the Authority may adopt rules and regulations prescribing the procedures by which persons may apply for assistance under this Act. Nothing herein shall be deemed to preclude the Authority, prior to the filing of any formal application, from conducting preliminary discussions and investigations with respect to the subject matter of any prospective application.

(e) The Authority shall have power to acquire by purchase, lease, gift or otherwise any property or rights therein from any person useful for its purposes, whether improved for the purposes of any prospective project, or unimproved. The Authority may also accept any donation of funds for its purposes from any such source. The Authority shall have no independent power of condemnation but may acquire any property or rights therein obtained upon condemnation by any other authority, governmental entity or unit of local government with such power.

(f) The Authority shall have power to develop, construct and improve either under its own direction, or through collaboration with any approved applicant, or to acquire through purchase or otherwise, any project, using for such purpose the proceeds derived from the sale of its bonds or from governmental loans or grants, and to hold title in the name of the Authority to such projects.

(g) The Authority shall have power to lease pursuant to a lease agreement any project so developed and constructed or acquired to the approved tenant on such terms and conditions as may be appropriate to further the purposes of this Act and to maintain the credit of the Authority. Any such lease may provide for either the Authority or the approved tenant to assume initially, in whole or in part, the costs of maintenance, repair and improvements during the leasehold period. In no case, however, shall the total rentals from any project during any initial leasehold period or the total loan repayments to be made pursuant to any loan agreement, be less than an amount necessary to return over such lease or loan period (1) all costs incurred in connection with the development, construction, acquisition or improvement of the project and for repair, maintenance and improvements thereto during the period of the lease or loan; provided, however, that the rentals or loan repayments need not include costs met through the use of funds other than those obtained by the Authority through the issuance of its bonds or governmental loans; (2) a reasonable percentage additive to be agreed upon by the Authority and the borrower or tenant to cover a properly allocable portion of the Authority's general expenses, including, but not limited to, administrative expenses, salaries and general insurance, and (3) an amount sufficient to pay when due all principal of, interest and premium, if any on, any bonds issued by the Authority with respect to the project. The portion of total rentals payable under clause (3) of this subsection (g) shall be deposited in such special accounts, including all sinking funds, acquisition or construction funds, debt service and other funds as provided by any resolution, mortgage or trust agreement of the Authority pursuant to which any bond is issued.

(h) The Authority has the power, upon the termination of any leasehold period of any project, to sell or lease for a further term or terms such project on such terms and conditions as the Authority shall deem reasonable and consistent with the purposes of the Act. The net proceeds from all such sales and the revenues or income from such leases shall be used to satisfy any indebtedness of the Authority with respect to such project and any balance may be used to pay any expenses of the Authority or be used for the further development, construction, acquisition or improvement of projects. In the event any project is vacated by a tenant prior to the termination of the initial leasehold period, the Authority shall sell or lease the facilities of the project on the most advantageous terms available. The net proceeds of any such disposition shall be treated in the same manner as the proceeds from sales or the revenues or income from leases subsequent to the termination of any initial leasehold period.

(i) The Authority shall have the power to make loans to persons to finance a project, to enter into loan agreements with respect thereto, and to accept guarantees from persons of its loans or the resultant evidences of obligations of the Authority.

(j) The Authority may fix, determine, charge and collect any premiums, fees, charges, costs and expenses, including, without limitation, any application fees, commitment fees, program fees, financing charges or publication fees from any person in connection with its activities under this Act.

(k) In addition to the funds established as provided herein, the Authority shall have the power to create and establish such reserve funds and accounts as may be necessary or desirable to accomplish its purposes under this Act and to deposit its available monies into the funds and accounts.

(l) At the request of the governing body of any unit of local government, the Authority is authorized to market such local government's revenue bond offerings by preparing bond issues for sale, advertising for sealed bids, receiving bids at its offices, making the award to the bidder that offers the most favorable terms or arranging for negotiated placements or underwritings of such securities. The Authority may, at its discretion, offer for concurrent sale the revenue bonds of several local governments. Sales by the Authority of revenue bonds under this Section shall in no way imply State guarantee of such debt issue. The Authority may require such financial information from participating local governments as it deems necessary in order to carry out the purposes of this subsection (1).

(m) The Authority may make grants to any county to which Division 5-37 of the Counties Code is applicable to assist in the financing of capital development, construction and renovation of new or existing facilities for hospitals and health care facilities under that Act. Such grants may only be made from funds appropriated for such purposes from the Build Illinois Bond Fund.

(n) The Authority may establish an urban development action grant program for the purpose of assisting municipalities in Illinois which are experiencing severe economic distress to help stimulate economic development activities needed to aid in economic recovery. The Authority shall determine the types of activities and projects for which the urban development action grants may be used, provided that such projects and activities are broadly defined to include all reasonable projects and activities the primary objectives of which are the development of viable urban communities, including decent housing and a suitable living environment, and expansion of economic opportunity, principally for persons of low and moderate incomes. The Authority shall enter into grant agreements from monies appropriated for such purposes from the Build Illinois Bond Fund. The Authority shall monitor the use of the grants, and shall provide for audits of the funds as well as recovery by the Authority of any funds determined to have been spent in violation of this subsection (n) or any rule or regulation promulgated hereunder. The Authority shall provide technical assistance with regard to the effective use of the urban development action grants. The Authority shall file an annual report to the General Assembly concerning the progress of the grant program.

(o) The Authority may establish a Housing Partnership Program whereby the Authority provides zero-interest loans to municipalities for the purpose of assisting in the financing of projects for the rehabilitation of affordable multi-family housing for low and moderate income residents. The Authority may provide such loans only upon a municipality's providing evidence that it has obtained private funding for the rehabilitation project. The Authority shall provide 3 State dollars for every 7 dollars obtained by the municipality from sources other than the State of Illinois. The loans shall be made from monies appropriated for such purpose from the Build Illinois Bond Fund. The total amount of loans available under the Housing Partnership Program shall not exceed $30,000,000. State loan monies under this subsection shall be used only for the acquisition and rehabilitation of existing buildings containing 4 or more dwelling units. The terms of any loan made by the municipality under this subsection shall require repayment of the loan to the municipality upon any sale or other transfer of the project.

(p) The Authority may award grants to universities and research institutions, research consortiums and other not-for-profit entities for the purposes of: remodeling or otherwise physically altering existing laboratory or research facilities, expansion or physical additions to existing laboratory or research facilities, construction of new laboratory or research facilities or acquisition of modern equipment to support laboratory or research operations provided that such grants (i) be used solely in support of project and equipment acquisitions which enhance technology transfer, and (ii) not constitute more than 60 percent of the total project or acquisition cost.

(q) Grants may be awarded by the Authority to units of local government for the purpose of developing the appropriate infrastructure or defraying other costs to the local government in support of laboratory or research facilities provided that such grants may not exceed 40% of the cost to the unit of local government.

(r) The Authority may establish a Direct Loan Program to make loans to individuals, partnerships or corporations for the purpose of an industrial project, as defined in Section 801-10 of this Act. For the purposes of such program and not by way of limitation on any other program of the Authority, the Authority shall have the power to issue bonds, notes, or other evidences of indebtedness including commercial paper for purposes of providing a fund of capital from which it may make such loans. The Authority shall have the power to use any appropriations from the State made especially for the Authority's Direct Loan Program for additional capital to make such loans or for the purposes of reserve funds or pledged funds which secure the Authority's obligations of repayment of any bond, note or other form of indebtedness established for the purpose of providing capital for which it intends to make such loans under the Direct Loan Program. For the purpose of obtaining such capital, the Authority may also enter into agreements with financial institutions and other persons for the purpose of selling loans and developing a secondary market for such loans. Loans made under the Direct Loan Program may be in an amount not to exceed $300,000 and shall be made for a portion of an industrial project which does not exceed 50% of the total project. No loan may be made by the Authority unless approved by the affirmative vote of at least 8 members of the board. The Authority shall establish procedures and publish rules which shall provide for the submission, review, and analysis of each direct loan application and which shall preserve the ability of each board member to reach an individual business judgment regarding the propriety of making each direct loan. The collective discretion of the board to approve or disapprove each loan shall be unencumbered. The Authority may establish and collect such fees and charges, determine and enforce such terms and conditions, and charge such interest rates as it determines to be necessary and appropriate to the successful administration of the Direct Loan Program. The Authority may require such interests in collateral and such guarantees as it determines are necessary to project the Authority's interest in the repayment of the principal and interest of each loan made under the Direct Loan Program.

(s) The Authority may guarantee private loans to third parties up to a specified dollar amount in order to promote economic development in this State.

(t) The Authority may adopt rules and regulations as may be necessary or advisable to implement the powers conferred by this Act.

(u) The Authority shall have the power to issue bonds, notes or other evidences of indebtedness, which may be used to make loans to units of local government which are authorized to enter into loan agreements and other documents and to issue bonds, notes and other evidences of indebtedness for the purpose of financing the protection of storm sewer outfalls, the construction of adequate storm sewer outfalls, and the provision for flood protection of sanitary sewage treatment plans, in counties that have established a stormwater management planning committee in accordance with Section 5-1062 of the Counties Code. Any such loan shall be made by the Authority pursuant to the provisions of Section 820-5 to 820-60 of this Act. The unit of local government shall pay back to the Authority the principal amount of the loan, plus annual interest as determined by the Authority. The Authority shall have the power, subject to appropriations by the General Assembly, to subsidize or buy down a portion of the interest on such loans, up to 4% per annum.

(v) The Authority may accept security interests as provided in Sections 11-3 and 11-3.3 of the Illinois Public Aid Code.

(w) Moral Obligation. In the event that the Authority determines that monies of the Authority will not be sufficient for the payment of the principal of and interest on its bonds during the next State fiscal year, the Chairperson, as soon as practicable, shall certify to the Governor the amount required by the Authority to enable it to pay such principal of and interest on the bonds. The Governor shall submit the amount so certified to the General Assembly as soon as practicable, but no later than the end of the current State fiscal year. This subsection shall apply only to any bonds or notes as to which the Authority shall have determined, in the resolution authorizing the issuance of the bonds or notes, that this subsection shall apply. Whenever the Authority makes such a determination, that fact shall be plainly stated on the face of the bonds or notes and that fact shall also be reported to the Governor. In the event of a withdrawal of moneys from a reserve fund established with respect to any issue or issues of bonds of the Authority to pay principal or interest on those bonds, the Chairperson of the Authority, as soon as practicable, shall certify to the Governor the amount required to restore the reserve fund to the level required in the resolution or indenture securing those bonds. The Governor shall submit the amount so certified to the General Assembly as soon as practicable, but no later than the end of the current State fiscal year. The Authority shall obtain written approval from the Governor for any bonds and notes to be issued under this Section. In addition to any other bonds authorized to be issued under Sections 825-60, 825-65(e), 830-25, and 845-5, 850-25, and 850-30, the principal amount of Authority bonds outstanding issued under this Section 801-40(w) or under 20 ILCS 3850/1-80 or 30 ILCS 360/2-6(c), which have been assumed by the Authority, shall not exceed $150,000,000.

(Source: P.A. 93-205, eff. 1-1-04; 94-91, eff. 7-1-05.)

(20 ILCS 3501/825-60)

Sec. 825-60. Financially Distressed City Assistance Program Limitation. In addition to the bonds authorized to be issued under Sections 801-40(w), 825-65(e), 830-25, and 845-5, 850-25, and 850-30, the Authority may have outstanding at any time, bonds for the purposes enumerated in Sections 825-20 through 825-60 in an aggregate principal amount that shall not exceed $50,000,000. Such bonds shall not constitute an indebtedness or obligation of the State of Illinois, and it shall be plainly stated on the face of each bond that it does not constitute such an indebtedness or obligation but is payable solely from the revenues, income or other assets of the Authority pledged therefor.

(Source: P.A. 93-205, eff. 1-1-04.)

(20 ILCS 3501/825-65)

Sec. 825-65. Clean Coal and Energy Project Financing.

(a) Findings and declaration of policy. It is hereby found and declared that Illinois has abundant coal resources and, in some areas of Illinois, the demand for power exceeds the generating capacity. Incentives to encourage the construction of coal-fired electric generating plants in Illinois to ensure power generating capacity into the future are in the best interests of all of the citizens of Illinois. The Authority is authorized to issue bonds to help finance Clean Coal and Energy projects pursuant to this Section.

(b) Definition. "Clean Coal and Energy projects" means new electric generating facilities, as defined in Section 605-332 of the Department of Commerce and Economic Opportunity Law of the Civil Administrative Code of Illinois, which may include mine-mouth power plants, projects that employ the use of clean coal technology, projects to provide scrubber technology for existing energy generating plants, or projects to provide electric transmission facilities.

(c) Creation of reserve funds. The Authority may establish and maintain one or more reserve funds to enhance bonds issued by the Authority for Clean Coal and Energy projects to develop alternative energy sources, including renewable energy projects, projects to provide scrubber technology for existing energy generating plants or projects to provide electric transmission facilities. There may be one or more accounts in these reserve funds in which there may be deposited:

(1) any proceeds of the bonds issued by the Authority required to be deposited therein by the terms of any contract between the Authority and its bondholders or any resolution of the Authority;

(2) any other moneys or funds of the Authority that it may determine to deposit therein from any other source; and

(3) any other moneys or funds made available to the Authority. Subject to the terms of any pledge to the owners of any bonds, moneys in any reserve fund may be held and applied to the payment of principal, premium, if any, and interest of such bonds.

(d) Powers and duties. The Authority has the power:

(1) To issue bonds in one or more series pursuant to one or more resolutions of the Authority for any Clean Coal and Energy projects authorized under this Section, within the authorization set forth in subsections (e) and (f).

(2) To provide for the funding of any reserves or other funds or accounts deemed necessary by the Authority in connection with any bonds issued by the Authority.

(3) To pledge any funds of the Authority or funds made available to the Authority that may be applied to such purpose as security for any bonds or any guarantees, letters of credit, insurance contracts or similar credit support or liquidity instruments securing the bonds.

(4) To enter into agreements or contracts with third parties, whether public or private, including, without limitation, the United States of America, the State or any department or agency thereof, to obtain any appropriations, grants, loans or guarantees that are deemed necessary or desirable by the Authority. Any such guarantee, agreement or contract may contain terms and provisions necessary or desirable in connection with the program, subject to the requirements established by the Act.

(5) To exercise such other powers as are necessary or incidental to the foregoing.

(e) Clean Coal and Energy bond authorization and financing limits. In addition to any other bonds authorized to be issued under Sections 801-40(w), 825-60, 830-25, and 845-5, 850-25, and 850-30, the Authority may have outstanding, at any time, bonds for the purpose enumerated in this Section 825-65 in an aggregate principal amount that shall not exceed $2,700,000,000, of which no more than $300,000,000 may be issued to finance transmission facilities, no more than $500,000,000 may be issued to finance scrubbers at existing generating plants, no more than $500,000,000 may be issued to finance alternative energy sources, including renewable energy projects and no more than $1,400,000,000 may be issued to finance new electric generating facilities, as defined in Section 605-332 of the Department of Commerce and Economic Opportunity Law of the Civil Administrative Code of Illinois, which may include mine-mouth power plants. An application for a loan financed from bond proceeds from a borrower or its affiliates for a Clean Coal and Energy project may not be approved by the Authority for an amount in excess of $450,000,000 for any borrower or its affiliates. These bonds shall not constitute an indebtedness or obligation of the State of Illinois and it shall be plainly stated on the face of each bond that it does not constitute an indebtedness or obligation of the State of Illinois, but is payable solely from the revenues, income or other assets of the Authority pledged therefor.

(f) Additional Clean Coal and Energy bond authorization and financing limits. In addition to any other bonds authorized to be issued under this Act, the Authority may issue bonds for the purpose enumerated in this Section 825-65 in an aggregate principal amount that shall not exceed $300,000,000.

(Source: P.A. 93-205, eff. 1-1-04.)

(20 ILCS 3501/830-25)

Sec. 830-25. Bonded indebtedness limitation. The Authority shall not have outstanding at any one time State Guarantees under Section 830-30 in an aggregate principal amount exceeding $160,000,000. The Authority shall not have outstanding at any one time State Guarantees under Sections 830-30, 830-35, 830-45 and 830-50 in the an aggregate principal amounts set forth under Section 850-25 amount exceeding $75,000,000.

(Source: P.A. 93-205, eff. 1-1-04.)

(20 ILCS 3501/Art. 850 heading new)

ARTICLE 850. BROADBAND DEPLOYMENT ASSISTANCE

(20 ILCS 3501/850-5 new)

Sec. 850-5. Findings and declaration of policy. It is hereby found and declared that certain areas of the State are not being adequately served with broadband services; that, for the benefit of the people of the State and the improvement of their health, welfare, and living conditions, the improvement of the economic and educational welfare of the State, and the improvement of the public safety and security of the State, it is essential that the broadband infrastructure of the State be expanded to provide broadband services throughout the State; that the private sector should be encouraged to invest in the deployment of broadband services and broadband infrastructure; that financing by the Authority will encourage investment in broadband services and broadband infrastructure; that the provision of affordable broadband services and investment in broadband infrastructure will assure the long-term growth of, and the enhancement and delivery of, services by the educational, medical, commercial, and governmental entities within the State, including, but not limited to, municipalities and counties, public safety facilities, judicial and criminal facilities, telemedical facilities, schools, colleges, universities, hospitals, libraries, community centers, businesses, nonprofit organizations, and residential properties; that providing capital access for broadband financing or refinancing through the Authority is in the best interest of the State and the exercise by the Authority of the powers granted in this Article will promote economic development resulting in increased employment and public revenues; and that the provisions of this Article are hereby declared to be in the public interest and for the public benefit.

(20 ILCS 3501/850-10 new)

Sec. 850-10. Definitions. As used in this Article:

(a) "Broadband customer" means a person who subscribes for, purchases, or uses broadband services.

(b) "Broadband developer" means a person in the business of acquiring, constructing, developing, or creating any part of the broadband infrastructure.

(c) "Broadband infrastructure" means all properties, facilities, equipment, technology, hardware, software, and other intellectual property necessary to provide broadband services in the State, including, but not limited to, voice, video, and data services.

(d) "Broadband operator" means a person in the business of operating any part of the broadband infrastructure.

(e) "Broadband project" means the acquisition, construction, provision, development, operation, maintenance, leasing, demolition, rehabilitation, renovation, upgrade, redevelopment, enhancement, or improvement of broadband infrastructure, broadband services, and technologies that constitute a part of, are related to, or otherwise enhance or improve broadband infrastructure or broadband services, the completion of which is deemed by the Authority to aid, assist, or encourage the provision, access, availability, offering, service, or use of broadband services to persons, whether public or private, for profit or not-for-profit, within the State or which will promote the expansion, retention, maintenance, or diversification of broadband services or broadband infrastructure within the State.

(f) "Broadband services" means those services, including, but not limited to, voice, video, and data, that provide capacity for transmission in excess of 200 kilobits per second in at least one direction regardless of the technology or medium used, including, but not limited to, wireless, copper wire, fiber optic cable, and coaxial cable. If voice transmission capacity is offered in conjunction with other services utilizing transmission in excess of 200 kilobits per second, the voice transmission capacity may be less than 200 kilobits per second. The Authority shall annually reconsider the 200 kilobits threshold under this Article with a bias toward raising the threshold in a manner consistent with technological advances.

(g) "Underserved areas" means geographic areas in this State identified by the Authority as having a need for broadband development. In identifying underserved areas, the Authority shall consider the area's economic conditions, including, but not limited to, median household income, availability and affordability of access to broadband services, lack of options available for broadband service, low percentage of residents subscribing for broadband service, and any other criteria considered important by the Authority in determining whether an area is underserved.

(20 ILCS 3501/850-15 new)

Sec. 850-15. Powers of the Authority. In addition to the other powers of the Authority granted pursuant to this Act, the Authority shall have all power and authority necessary to carry out and effectuate the purposes of this Article, including, but not limited to, all of the following:

(a) To make loans to finance or refinance all or any portion of broadband projects, to enter into loan agreements with respect thereto, to accept guarantees from persons of its loans or the resultant evidences of obligations of the Authority and to accept such interests in collateral as it determines are necessary to protect the Authority's interest in the repayment of the principal and interest of each loan made. For the purpose of making such loans and not by way of limitation on any program of the Authority, the Authority shall have the power to issue bonds, notes, or other evidences of indebtedness, including commercial paper for purposes of providing a fund of capital from which it may make such loans. The Authority shall have the power to use any appropriations from the State made especially for the purpose of funding broadband projects for additional capital to make such loans or for the purposes of reserve funds or pledged funds that secure the Authority's obligations of repayment of any bond, note, or other form of indebtedness established for the purpose of providing capital from which it intends to make such loans for broadband projects. For the purpose of obtaining such capital, the Authority may also enter into agreements with financial institutions and other persons for the purpose of selling loans and developing a secondary market for such loans. The Authority may charge such interest rates and determine the terms and conditions for the loans as it determines to be necessary and appropriate to the successful administration of the loan. Priority for making loans may be given for broadband projects targeted to underserved areas.

(b) To provide a guarantee of private loans to third parties up to a specified dollar amount in order to promote, aid, or assist broadband projects within this State.

(c) To receive and distribute state or local funding, including grants, loans, general appropriations, and appropriations made for broadband projects.

(d) To purchase or to make commitments to purchase, from lenders, notes, debentures, bonds, or other evidences of indebtedness secured by mortgages, deeds of trust, equipment, or other security or unsecured, as the Authority may determine, or portions thereof or participations therein, which notes, bonds, or other evidences of indebtedness shall have been or will be executed by the obligors thereon to obtain funds for broadband projects.

(e) To contract with lenders or others for the origination of or the servicing of the loans made by the Authority pursuant to this Article or represented by the notes, bonds, or other evidences of indebtedness that it has purchased pursuant to this Article.

(f) To provide a State guarantee of loans, notes, or other evidences of indebtedness relating to broadband projects (as provided in Section 850-20) with a lender or a person holding a loan, note, or other evidence of indebtedness and to sell or issue such State guarantees, bonds, or evidences of indebtedness in a primary or secondary market.

(g) To fix, determine, charge and collect any premiums, fees, charges, costs, and expenses, including, without limitation, any application fees, commitment fees, program fees, financing charges, or publication fees from any person in connection with its activities under this Article.

(h) To issue bonds for the purpose of funding broadband projects. Bonds may be issued by the Authority in one or more series and may provide for the payment of any interest deemed necessary on such bonds, of the costs of issuance of such bonds, of any premium on any insurance, or of the cost of any guarantees, letters of credit, or other similar documents, may provide for the funding of the reserves deemed necessary in connection with such bonds and may provide for the refunding or advance refunding of any bonds or for accounts deemed necessary in connection with broadband projects. The bonds may bear interest payable at any time or times and at any rate or rates, notwithstanding any other provision of law to the contrary, and such rate or rates may be established by an index or formula that may be implemented or established by persons appointed or retained therefor by the Authority, or may bear no interest or may bear interest payable at maturity or upon redemption prior to maturity, may bear such date or dates, may be payable at such time or times and at such place or places, may mature at any time or times not later than 40 years from the date of issuance, may be sold at public or private sale at such time or times and at such price or prices, may be secured by such pledges, reserves, guarantees, letters of credit, insurance contracts, or other similar credit support or liquidity instruments, may be executed in such manner, may be subject to redemption prior to maturity, may provide for the registration of the bonds, and may be subject to such other terms and conditions all as may be provided by the resolution or indenture authorizing the issuance of such bonds. The bonds may be secured as provided in the authorizing resolution by the receipts, revenues, income, and other available funds of the Authority and by any amounts derived by the Authority from the loan agreement or lease agreement with respect to the broadband project or projects. Bonds may be issued as general obligations of the Authority payable from such revenues, funds, and obligations of the Authority as the bond resolution shall provide, or may be issued as limited obligations with a claim for payment solely from such revenues, funds, and obligations as the bond resolution shall provide. The Authority may grant a specific pledge or assignment of and lien on or security interest in such rights, revenues, income, or amounts and may grant a specific pledge or assignment of and lien on or security interest in any reserves, funds, or accounts established in the resolution authorizing the issuance of bonds. Any such pledge, assignment, lien, or security interest for the benefit of the holders of the Authority's bonds shall be valid and binding from the time the bonds are issued without any physical delivery or further act, and shall be valid and binding as against and prior to the claims of all other parties having claims against the Authority or any other person irrespective of whether the other parties have notice of the pledge, assignment, lien, or security interest. As evidence of such pledge, assignment, lien, and security interest, the Authority may execute and deliver a mortgage, trust agreement, indenture, or security agreement or an assignment thereof. It is expressly understood that the Authority may, but need not, acquire title to any project with respect to which it exercises its authority.

(i) To issue a single bond issue, or a series of bond issues as provided in paragraph (h) above, for a group of broadband projects, a group of broadband developers, a group of broadband operators, a group of broadband customers, or any combination thereof.

(j) To create and establish the Broadband Reserve Fund as set forth in Section 850-40.

(k) To obtain and maintain guarantees, letters of credit, insurance contracts, or similar credit support or liquidity instruments that are deemed necessary or desirable in connection with any bonds, notes, or other obligations of the Authority relating to broadband projects.

(l) To make and enter into all other agreements and contracts and execute all instruments necessary or incidental to performance of the Authority's duties and execution of its powers under this Article.

(m) To provide financing as provided in this Article to any person, whether public or private, for profit or not-for-profit, including, without limitation, units of government and associations of units of government.

(n) To assist through financing and refinancing the expansion of broadband infrastructure and broadband services in the State.

(o) To exercise such other powers as are necessary or incidental to the foregoing including, without limitation, promulgating rules, regulations, or policies of the Authority deemed necessary, desirable, appropriate, or incidental to carrying out the powers of this Article.

(20 ILCS 3501/850-20 new)

Sec. 850-20. State guarantees of broadband projects.

(a) The Authority is authorized to issue State guarantees to lenders for loans, notes, or other obligations of indebtedness for eligible broadband projects. For the purposes of this Section 850-20, an eligible broadband project shall be a project that provides, promotes, develops, improves, or otherwise enhances access to broadband services in underserved areas of the State. Lenders shall apply for the State guarantees on forms provided by the Authority and certify that the application and any other documents submitted are true and correct. The lender or borrower, or both in combination, shall pay an administrative fee as determined by the Authority. The applicant for a State guarantee is responsible for paying any fees or charges involved in recording mortgages, releases, financing statements, insurance for secondary market issues, and any other similar fees or charges as the Authority may require. The application shall include such information as determined by the Authority to be necessary and desirable for the Authority to determine the identity of the borrower and lender, the creditworthiness of the borrower, and information pertinent to determining the value of collateral to be used to secure the State guarantee. In addition, the lender must agree to charge a fixed or adjustable rate of interest on the loan that, in the opinion of the Authority, is below the market rate of interest for similarly-situated loans or is otherwise advantageous to the borrower. If both the lender and applicant agree, the interest rate on the loan may be converted to a fixed interest rate at any time during the term of the loan. With respect to loans for which State guarantees are provided under this Section, (i) the aggregate principal amount of any loans outstanding for a single borrower may not exceed $1,000,000, (ii) the loans must be set up on a payment schedule not to exceed 30 years, and shall be no longer than 15 years in duration, and (iii) the loans are subject to an annual review and renewal by the lender and the Authority. No State guarantee may be revoked by the Authority without a 90-day notice, in writing, to all parties.

(b) The Authority shall provide or renew a State guarantee to a lender if:

(i) The lender pays to the Authority the renewal fee (which shall be established, from time to time, by the Authority);

(ii) The application provides collateral acceptable to the Authority that is at least equal to the State's portion of the State guarantee to be provided;

(iii) The lender assumes all responsibility and costs for pursuing legal action on collecting any loan that is delinquent or in default; and

(iv) The lender is responsible for the first 15% of the outstanding principal of the note for which the State Guarantee has been applied.

(c) There is hereby created outside of the State treasury a special fund to be known as the Illinois Broadband Loan Guarantee Fund. The State Treasurer is the custodian of this Fund. Any amounts in the Illinois Broadband Loan Guarantee Fund not currently needed to meet the obligations of the Fund shall be invested as provided by law, and all interest earned from these investments shall be deposited into the Fund until the Fund reaches the maximum amount authorized under this Section; thereafter, interest earned shall be deposited into the General Revenue Fund. After June 30, 2011, annual investment earnings equal to 1.5% of the Fund must remain in the Fund to be used for the purposes established under this Section. The Authority is authorized to transfer to the Fund such amounts as are necessary to satisfy claims during the duration of the State Guarantee program to secure State Guarantees issued under this Section. If, for any reason, the General Assembly fails to make an appropriation sufficient to meet these obligations, this Act shall constitute an irrevocable and continuing appropriation of an amount necessary to secure guarantees as defaults occur and the irrevocable and continuing authority for, and direction to, the State Treasurer and the Comptroller to make the necessary transfers to the Illinois Broadband Loan Guarantee Fund, as directed by the Governor, out of the General Revenue Fund. Within 30 days after the effective date of this Act, the State shall transfer up to $5,000,000 from available appropriations into the Illinois Broadband Loan Guarantee Fund for the purposes of this Act. Thereafter, the Authority may transfer additional amounts into the Illinois Broadband Loan Guarantee Fund to secure guarantees for defaults as defaults occur. In the event of default by the borrower, the lender is entitled to, and the Authority shall direct payment on, the State guarantee after 90 days of delinquency. All payments by the Authority shall be made from the Illinois Broadband Loan Guarantee Fund to satisfy claims against the State guarantee. The Illinois Broadband Loan Guarantee Fund shall guarantee receipt of payment of up to 85% of the principal and interest owed on the State guaranteed loan by the borrower to the guarantee holder. It is the responsibility of the lender to proceed with the collecting and disposing of collateral on the State Guarantee within 14 months after the time the State guarantee is declared delinquent; provided, however, that the lender shall not collect or dispose of collateral on the State guaranteed loan without the express written prior approval of the Authority. If the lender does not dispose of the collateral within 14 months, the lender is liable to repay to the State interest on the State guaranteed loan equal to the same rate that the lender charges on the State guaranteed loan; provided, however, that the Authority may extend the 14-month period for a lender in the case of bankruptcy or extenuating circumstances. The Fund shall be reimbursed for any amounts paid under this Section upon liquidation of the collateral. The Authority, by resolution of the Board, may borrow sums from the Fund and provide for repayment as soon as may be practical upon receipt of payments of principal and interest by a borrower. Money may be borrowed from the Fund by the Authority for the sole purpose of paying certain interest costs for borrowers associated with selling a loan subject to a State Guarantee in a secondary market as may be deemed reasonable and necessary by the Authority.

(d) Notwithstanding the provisions under this Section concerning borrowers and lenders who may obtain a State Guarantee, from time to time, the Authority may adopt rules establishing eligibility requirements of borrowers and lenders to participate in the State Guarantee program and may impose terms, conditions, standards and procedures for participating in the program.

(20 ILCS 3501/850-25 new)

Sec. 850-25. Loan guarantee limitation. The Authority shall not have outstanding, at any one time, State guarantees issued under Sections 830-30, 830-35, 830-45, 830-50, and 850-20 in an aggregate principal amount exceeding $235,000,000. Of this amount the Authority shall not have outstanding at any one time State Guarantees (1) under Section 830-30 in an aggregate principal amount exceeding $160,000,000, (2) under Sections 830-35, 830-45 and 830-50 in an aggregate principal amount exceeding $75,000,000, and (3) under Section 850-20 in an aggregate principal amount exceeding $50,000,000.

(20 ILCS 3501/850-30 new)

Sec. 850-30. Additional security for bonds; moral obligation. If so determined by the Authority, with the written approval of the Governor, the Authority may provide, as additional security to any bonds or notes issued pursuant to this Article, that this Section applies to an issuance of bonds or notes. If so determined, (i) in the event that the Authority determines that the revenues, income, or other assets of the Authority pledged as security for any such bonds or notes will not be sufficient for the payment of the principal of and interest on the bonds issued by the Authority during the next State fiscal year or (ii) in the event of a withdrawal of moneys from a reserve fund established with respect to any issue or issues of bonds or notes of the Authority to pay principal, premium, if any, and interest on the bonds or notes, the Chairperson of the Authority, as soon as practicable, shall certify to the Governor the amount required by the Authority to enable it to pay the principal, premium, if any, and interest on the bonds or notes, or the amount required to restore the reserve fund to the level required in the resolution or indenture securing those bonds or notes, as the case may be. The Governor shall submit the amount so certified to the General Assembly as soon as practicable, but no later than the end of the current State fiscal year. This Section 850-30 applies only to those bonds or notes as to which the Authority has specifically determined, in the resolution authorizing the issuance of the bonds or notes, that this Section applies. Bonds or notes issued pursuant to this Section 850-30, shall not constitute an indebtedness of the State of Illinois, and it shall be plainly stated on the face of each bond or note that it does not constitute an indebtedness of the State of Illinois, but is payable solely from the revenues, income, or other assets of the Authority pledged therefor, subject to the General Assembly's right, but not legal obligation, to determine to make an appropriation for the payment of principal, premium, if any, and interest on such bonds or notes or to restore the reserve fund to the level required in the resolution or indenture.

(20 ILCS 3501/850-35 new)

Sec. 850-35. Moral obligation limit. In addition to any other bonds or notes authorized to be issued under Sections 801-40(w), 825-60, 825-65(e), 830-25, 845-5, and 850-25 of the Act, the aggregate principal amount of the Authority bonds outstanding at any time issued under Section 850-30 shall not exceed $100,000,000. An application for a loan financed from bond proceeds from a borrower or its affiliates for a broadband project may not be approved by the Authority for an amount in excess of $5,000,000 for any single borrower or its affiliates.

(20 ILCS 3501/850-40 new)

Sec. 850-40. Broadband reserve fund.

(a) There is hereby created the Broadband Reserve Fund in the Authority. The Authority shall pay into the reserve fund (i) any moneys appropriated and made available by the State for the purpose of the fund, (ii) any proceeds of sale of notes or bonds to the extent provided in the resolution or resolutions of the Authority authorizing the issuance thereof, and (iii) any other moneys that may be available to the Authority for the purpose of the fund from any other source or sources. All moneys held in the fund, except as hereinafter provided, shall be used, as required, for: (i) the payment of the principal of bonds or notes secured in whole or in part by the fund or of the sinking fund payments with respect to such bonds or notes, the purchase or redemption of such bonds or notes, the payment of interest on such bonds or notes or the payment of any redemption premium required to be paid when such bonds or notes are redeemed prior to maturity; (ii) the payment of the cost of any letter of credit, insurance, or third-party guarantee provided with respect to any notes or bonds issued by the Authority; (iii) the payment of costs of the Authority incurred in connection with the issuance of bonds or notes; or (iv) the enhancement of the credit of any bond or note issued by the Authority. Moneys in the fund may not be withdrawn at any time in an amount that would reduce the amount of the fund to less than the minimum amount necessary to satisfy the obligations secured by the fund as provided by the resolutions of the Authority, except for the purpose of making, with respect to bonds or notes secured, in whole or in part, by such fund, payment when due, for the purposes provided above. Any income or interest earned by, or increment to, the reserve fund due to the investment of fund moneys shall be maintained in the fund and used for the purposes provided in this Section.

(b) The Authority may not at any time issue bonds or notes, secured in whole or in part, by the reserve fund, if upon the issuance of the bonds or notes, the amount in the reserve fund will be less than the minimum amount necessary to pay obligations secured by the fund, unless the Authority, at the time of issuance of the bonds or notes deposits into the fund from the proceeds of the bonds or notes to be issued, or from other sources an amount that, together with the amount then in the fund, will not be less than the minimum amount necessary to satisfy the obligations secured by the fund.

(c) In computing the amount of the reserve fund for the purpose of this Section, securities in which all or a portion of the fund is invested must be valued either (i) at par, or if purchased at less than par, at their cost to the Authority or (ii) as provided in the resolution authorizing the issuance of the bonds or notes that are to be secured by the fund.

(d) In addition to, or in lieu of, depositing money in the fund, the Authority may obtain or pledge letters of credit, insurance policies, surety bonds, guarantees, or other security arrangements. The amount available under letters of credit, insurance policies, surety bonds, guarantees, or other security arrangements pledged to the fund shall be credited toward the minimum amount necessary to satisfy the obligations secured by the fund.

(e) The fund shall be created by the Authority, shall be separate and segregated from all other funds and accounts of the Authority, and, at the discretion of the Authority, may be maintained by a corporate trustee (which may be any trust company or bank having the power of a trust company within the State).

(f) This Section 850-40 applies only to those bonds or notes, for such purposes, and in such amounts as to which the Authority has specifically determined, in the resolution authorizing the issuance of the bonds or notes, that this Section applies.

(g) The State may transfer moneys from available appropriations to the Broadband Reserve Fund. To initially establish the Broadband Reserve Fund, the State may transfer up to $5,000,000 to the Fund from available appropriations.

(20 ILCS 3501/850-45 new)

Sec. 850-45. Tax Exemption. The exercise of the powers granted in this Article are in all respects for the benefit of the people of Illinois and, in consideration thereof are free from all taxation by the State or its political subdivisions, except for estate, transfer, and inheritance taxes. For the purposes of Section 250 of the Illinois Income Tax Act, the exemption of the income from bonds issued under this Article shall terminate after all of the bonds have been paid. The amount of the income that must be added and then subtracted on the Illinois income tax return of a taxpayer, pursuant to Section 203 of the Illinois Income Tax Act, from federal adjusted gross income or federal taxable income in computing Illinois base income is the interest net of any bond premium amortization.

Section 99. Effective date. This Act takes effect upon becoming law.