HB5163 97TH GENERAL ASSEMBLY

LRB097 18390 PJG 63616 b

97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB5163

Introduced 2/8/2012, by Rep. Brandon W. Phelps

SYNOPSIS AS INTRODUCED:

30 ILCS 350/11

from Ch. 17, par. 6911

Amends the Local Government Debt Reform Act. Provides that bonds that have been refunded shall not be considered to be indebtedness for the purposes of any statutory or other debt limitation if the refunded bonds are secured by and to be paid as to principal, interest, and premium from an escrow account that is invested in certain obligations and is determined to be sufficient for the timely payment of principal and interest on the refunded bonds. Provides that any governmental unit may deposit cash into an escrow account to be held uninvested for the purpose of refunding or providing for the payment of principal, interest, and premium on its bonds.

FISCAL 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 Local Government Debt Reform Act is amended by changing Section 11 as follows:

(30 ILCS 350/11) (from Ch. 17, par. 6911)

Sec. 11. Refundings and redemption premiums. Bonds may be refunded or advance refunded upon such terms as the governing body may set in accordance with this Act, for such term of years, not in excess of the maximum term of years permitted by applicable law for the bonds to be refunded, and in such principal amount, all as may be deemed necessary by the governing body. Revenue bonds may be issued to refund general obligation bonds or alternate bonds issued under this Act. General obligation bonds shall not be issued to refund revenue bonds or alternate bonds except as expressly permitted by applicable law. Any redemption premium payable upon the redemption of bonds may be payable from the proceeds of refunding bonds which may be issued for the purpose of refunding such bonds, from any other lawfully available source or from both proceeds and such other sources.

Bonds which have been refunded shall not be considered to be indebtedness for the purposes of any statutory or other debt limitation if such refunded bonds are secured by and to be paid as to principal, interest, and premium, if any, from an escrow account which is: (i) invested in (a) obligations of the United States of America, (b) obligations which are guaranteed by the full faith and credit of the United States of America as to the timely payment of principal and interest, or (c) bonds of any state or governmental unit that are rated at the time of purchase within the 3 highest general classifications established by a rating service of nationally recognized expertise in rating bonds of states and their political subdivisions; and (ii) determined by an independent certified public accountant or nationally recognized feasibility analyst to be sufficient to provide for the timely payment of principal of and interest on the refunded bonds when due or upon redemption.

Any governmental unit may deposit cash into an escrow account to be held uninvested for the purpose of refunding or providing for the payment of principal, interest, and premium, if any, on its bonds, and bonds which have been so refunded or provided for shall not be considered to be indebtedness for the purposes of any statutory or other debt limitation.

(Source: P.A. 90-306, eff. 8-1-97.)