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Full Text of SB0010  100th General Assembly

SB0010 100TH GENERAL ASSEMBLY

  
  

 


 
100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
SB0010

 

Introduced 1/11/2017, by Sen. John J. Cullerton

 

SYNOPSIS AS INTRODUCED:
 
65 ILCS 5/Art. 8 Div. 13 heading new
65 ILCS 5/8-13-5 new
65 ILCS 5/8-13-10 new
65 ILCS 5/8-13-15 new
65 ILCS 5/8-13-20 new

    Amends the Illinois Municipal Code. Provides that a home rule municipality may enter into an agreement to assign, sell, transfer, or otherwise convey its interest in all of part of any revenues or taxes that it receives from the State Comptroller, the State Treasurer, or the Department of Revenue, and sets for the requirements for such agreements. Provides that the State pledges not to limit or alter the disposition of receipts transferred under these provisions. Provides that these provisions are applicable to home rule units and that they restrict the power of home rule units. Defines terms. Effective immediately, but this Act does not take effect at all unless Senate Bills 1, 2, 3, 4, 5, 6, 7, 8, 9, 11, 12, and 13 of the 100th General Assembly become law.


LRB100 06345 HLH 16383 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

SB0010LRB100 06345 HLH 16383 b

1    AN ACT concerning finance.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Municipal Code is amended by adding
5Division 13 to Article 8 as follows:
 
6    (65 ILCS 5/Art. 8 Div. 13 heading new)
7
DIVISION 13. ASSIGNMENT OF RECEIPTS

 
8    (65 ILCS 5/8-13-5 new)
9    Sec. 8-13-5. Definitions. As used in this Article:
10    "Assignment agreement" means an agreement between a
11transferring unit and an issuing entity for the conveyance of
12all or part of any revenues or taxes received by the
13transferring unit from a State entity.
14    "Conveyance" means an assignment, sale, transfer, or other
15conveyance.
16    "Deposit account" means a designated escrow account
17established by an issuing entity at a trust company or bank
18having trust powers for the deposit of transferred receipts
19under an assignment agreement.
20    "Issuing entity" means (i) a corporation, trust or other
21entity that has been established for the limited purpose of
22issuing obligations for the benefit of a transferring unit, or

 

 

SB0010- 2 -LRB100 06345 HLH 16383 b

1(ii) a bank or trust company in its capacity as trustee for
2obligations issued by such bank or trust company for the
3benefit of a transferring unit.
4    "State entity" means the State Comptroller, the State
5Treasurer, or the Illinois Department of Revenue.
6    "Transferred receipts" means all or part of any revenues,
7taxes, or grant funds received from a State entity that have
8been conveyed by a transferring unit under an assignment
9agreement.
10    "Transferring unit" means a home rule municipality located
11in the State.
 
12    (65 ILCS 5/8-13-10 new)
13    Sec. 8-13-10. Assignment of receipts.
14    (a) Any transferring unit which receives revenues, taxes,
15or grant funds from a State entity may (to the extent not
16prohibited by any applicable statute, regulation, rule, or
17grant agreement governing the use of such revenues, taxes, or
18grant funds) authorize, by ordinance, the conveyance of all or
19any portion of such revenues, taxes, or grant funds to an
20issuing entity. Any conveyance of transferred receipts shall:
21(i) be made pursuant to an assignment agreement in exchange for
22the net proceeds of obligations issued by the issuing entity
23for the benefit of the transferring unit and shall, for all
24purposes, constitute an absolute conveyance of all right,
25title, and interest therein; (ii) not be deemed a pledge or

 

 

SB0010- 3 -LRB100 06345 HLH 16383 b

1other security interest for any borrowing by the transferring
2unit; (iii) be valid, binding, and enforceable in accordance
3with the terms thereof and of any related instrument,
4agreement, or other arrangement, including any pledge, grant of
5security interest, or other encumbrance made by the issuing
6entity to secure any obligations issued by the issuing entity
7for the benefit of the transferring unit; and (iv) not be
8subject to disavowal, disaffirmance, cancellation, or
9avoidance by reason of insolvency of any party, lack of
10consideration, or any other fact, occurrence, or State law or
11rule. On and after the effective date of the conveyance of the
12transferred receipts, the transferring unit shall have no
13right, title or interest in or to the transferred receipts
14conveyed and the transferred receipts so conveyed shall be the
15property of the issuing entity to the extent necessary to pay
16the obligations issued by the issuing entity for the benefit of
17the transferring unit, and shall be received, held, and
18disbursed by the issuing entity in a trust fund outside the
19treasury of the transferring unit. An assignment agreement may
20provide for the periodic reconveyance to the transferring unit
21of amounts of transferred receipts remaining after the payment
22of the obligations issued by the issuing entity for the benefit
23of the transferring unit.
24    (b) In connection with any conveyance of transferred
25receipts, the transferring unit is authorized to direct the
26applicable State entity to deposit or cause to be deposited any

 

 

SB0010- 4 -LRB100 06345 HLH 16383 b

1amount of such transferred receipts into a deposit account in
2order to secure the obligations issued by the issuing entity
3for the benefit of the transferring unit. Where the
4transferring unit states that such direction is irrevocable,
5the direction shall be treated by the applicable State entity
6as irrevocable with respect to the transferred receipts
7described in such direction. Each State entity shall comply
8with the terms of any such direction received from a
9transferring unit and shall execute and deliver such
10acknowledgments and agreements, including escrow and similar
11agreements, as the transferring unit may require to effectuate
12the deposit of transferred receipts in accordance with the
13direction of the transferring unit.
14    (c) Not later than the date of issuance by an issuing
15entity of any obligations secured by collections of transferred
16receipts, a certified copy of the ordinance authorizing the
17conveyance of the right to receive the transferred receipts,
18together with executed copies of the applicable assignment
19agreement and the agreement providing for the establishment of
20the deposit account, shall be filed with the State entity
21having custody of the transferred receipts.
 
22    (65 ILCS 5/8-13-15 new)
23    Sec. 8-13-15. Pledges and agreements of the State. The
24State of Illinois pledges to and agrees with each transferring
25unit and issuing entity that the State will not limit or alter

 

 

SB0010- 5 -LRB100 06345 HLH 16383 b

1the rights and powers vested in the State entities by this
2Article with respect to the disposition of transferred receipts
3so as to impair the terms of any contract, including any
4assignment agreement, made by the transferring unit with the
5issuing entity or any contract executed by the issuing entity
6in connection with the issuance of obligations by the issuing
7entity for the benefit of the transferring unit until all
8requirements with respect to the deposit by such State entity
9of transferred receipts for the benefit of such issuing entity
10have been fully met and discharged. In addition, the State
11pledges to and agrees with each transferring unit and each
12issuing entity that the State will not limit or alter the basis
13on which transferred receipts are to be paid to the issuing
14entity as provided in this Article, or the use of such funds,
15so as to impair the terms of any such contract. Each
16transferring unit and issuing entity is authorized to include
17these pledges and agreements of the State in any contract
18executed and delivered as described in this Article. In no way
19shall the pledge and agreements of the State be interpreted to
20construe the State as a guarantor of any debt or obligation
21subject to an assignment agreement under this Division.
 
22    (65 ILCS 5/8-13-20 new)
23    Sec. 8-13-20. Home rule. A home rule unit may not enter
24into assignment agreements in a manner inconsistent with the
25provisions of this Article. This Section is a limitation under

 

 

SB0010- 6 -LRB100 06345 HLH 16383 b

1subsection (i) of Section 6 of Article VII of the Illinois
2Constitution on the concurrent exercise by home rule units of
3powers and functions exercised by the State.
 
4    Section 99. Effective date. This Act takes effect upon
5becoming law, but this Act does not take effect at all unless
6Senate Bills 1, 2, 3, 4, 5, 6, 7, 8, 9, 11, 12, and 13 of the
7100th General Assembly become law.