50 ILCS 420/ Tax Anticipation Note Act.

(50 ILCS 420/0.01) (from Ch. 85, par. 820)

Sec. 0.01. Short title. This Act may be cited as the Tax Anticipation Note Act.

(Source: P.A. 86-1324.)

(50 ILCS 420/1) (from Ch. 85, par. 821)

Sec. 1. As used in this Act "Unit of Government" means any county, municipality, township, special district or unit of local government designated as a unit of local government by law authorized to levy ad valorem taxes, or any school district or public community college district. "Governing Body" means the council, board, commission or body, by whatever name it is known, having charge of the finances of the Unit of Government.

(Source: P.A. 82-622.)

(50 ILCS 420/2) (from Ch. 85, par. 822)

Sec. 2. Any Unit of Government may issue from time to time general obligation notes (hereinafter called the "Notes") in an amount including principal, interest thereon and costs of issuance thereof not to exceed 85% of the taxes levied, for a specific fund, for the year during which the Notes are issued. No Notes shall be issued, however, during any fiscal year in which there are tax anticipation warrants outstanding against the tax levied for such fiscal year.

(Source: P.A. 84-953.)

(50 ILCS 420/3) (from Ch. 85, par. 823)

Sec. 3. The Notes shall bear interest at a rate or rates not to exceed that permitted in "An Act to authorize public corporations to issue bonds, other evidences of indebtedness and tax anticipation warrants subject to interest rate limitations set forth therein", approved May 26, 1970, as now or hereafter amended. Such notes shall mature within two years from the date issued. The Unit of Government shall be permitted to refund the Notes at or before the maturity date thereof if it reasonably appears that at such maturity date the taxes which have been pledged for the payment of the Notes have not been or will not be collected and received by the Unit of Government. The maturity date of the refunding Notes shall be the earliest date at which it is deemed possible to pay the Notes coming due. The Notes and the refunding Notes shall be the direct general obligations of the Unit of Government and shall so represent on the face thereof. The full faith and credit of the Unit of Government shall be pledged for the punctual payment of the principal of and interest on the Notes and on the refunding Notes.

(Source: P.A. 84-953.)

(50 ILCS 420/4) (from Ch. 85, par. 824)

Sec. 4. Adoption of ordinance or resolution. In order to authorize and issue the Notes the Governing Body shall adopt an ordinance (or resolution where appropriate) fixing the amount of Notes, the date thereof, the maturity thereof, rate of interest thereof unless the Notes are to be sold by public bid, place of payment and denomination, which shall be in equal multiples of $1,000, and provide for the levy and collection of a direct annual tax upon all the taxable property in the Unit of Government sufficient to pay the principal of and interest on the Notes to maturity. Upon the filing in the office of the county clerk in each county in which the Unit of Government is located of a certified copy of such an ordinance (or resolution where appropriate), adopted by the Governing Body it shall be the duty annually of the county clerk to extend the tax therefor in addition to and in excess of all other taxes heretofore or hereafter authorized to be levied by such Unit of Government or on behalf of such Unit of Government.

(Source: P.A. 89-281, eff. 8-10-95.)

(50 ILCS 420/4.1) (from Ch. 85, par. 824.1)

Sec. 4.1. (a) The purpose of this Section is to provide a means for units of local government and school districts to finance anticipated cash flow deficits by issuing notes to anticipate the personal property tax replacement taxes.

(b) Definitions. As used in this Section, the following words or terms shall have the meanings set forth opposite each, unless the context clearly indicates another meaning is intended:

"Director" - the Director of the Department of Revenue.

"Entitlement" - the amount of the Replacement Tax paid or to be paid in any given full year to a Unit of Government.

"Governing Body" - the council, board, commission, trustees, or body, by whatever name it is known, charged with the responsibility of governing the financial affairs of a Unit of Government.

"Note(s)" - one or more of the notes issued under this Section in anticipation of the receipt of Replacement Taxes.

"Replacement Taxes" - the tax or taxes, as by law now or hereafter enacted or amended, imposed by the General Assembly to replace revenue lost by Units of Government as a result of the abolition of ad valorem personal property taxes pursuant to Article IX, Section 5(c) of the Constitution of the State of Illinois.

(c) Authority to issue. Notes may be issued by Units of Government as provided in this Act.

(d) Term of Notes. Notes may be issued to anticipate Personal Property Replacement Taxes for the current and next two succeeding calendar years from the time of issuance of the Notes. Notes shall have a specified due date not more than 24 months after the date of issue of the Notes. The Unit of Government shall be permitted to refund the Notes at or before the maturity date thereof if it reasonably appears that at such maturity date the revenues which have been pledged for the payment of the Notes have not been or will not be collected and received by the Unit of Government. The maturity date of the refunding Notes shall be the earliest date at which it is deemed possible to pay the Notes coming due.

(e) Amount of Notes. Notes may be issued in an amount including principal, interest thereon and costs of issuance thereof not to exceed 75% of the Entitlement of Replacement Taxes for the year anticipated, less the aggregate amount of such entitlement which the governing body estimates will be required to be set aside for the payment of the proportional amount of debt service and pension or retirement obligations as required by Section 12 of "An Act in relation to State revenue sharing with local government entities", approved July 31, 1969, as amended. If the Entitlement for such year has not yet been certified by the Director, Notes may be issued for such year based upon 90% of the last known Entitlement as certified by the Director. An estimate of Entitlement may be used as provided in subsection (f) of this Section. For the purposes of this Section, the anticipated Entitlement of Replacement Taxes for the year shall be that amount reasonably anticipated by a Unit of Government and shall be set forth by such Unit of Government in an ordinance, or where appropriate, a resolution. The adoption of said ordinance, or where appropriate, resolution, shall precede any issue of Notes under this Section.

(f) Certification. At any time, upon the request of a Unit of Government, the Director shall certify, under signature and seal, a Unit of Government's last known Entitlement. During the initial period after first imposition of the Replacement Tax, before any Entitlement is "last known," as aforesaid, the Director, no later than two months after the passage of an act to impose Replacement Taxes, shall certify an estimate of a Unit of Government's first Entitlement, and such Entitlement may be used immediately upon certification for purposes of the issuance of Notes. Certification shall be conclusive evidence of Entitlement but only for purposes of the issuance and validity of Notes. The Director shall in no way be liable for error or miscalculation in certification of Entitlements.

(g) Interest on Notes. Notes shall bear interest at a rate or rates not in excess of that permitted in "An Act to authorize public corporations to issue bonds, other evidences of indebtedness and tax anticipation warrants subject to interest rate limitations set forth therein", approved May 26, 1970, as now or hereafter amended. Notes shall be sold at a price of not less than par plus accrued interest.

(h) Source of Payment of Notes. The Notes shall be general obligations of the Unit of Government, and the full faith and credit of the Unit of Government shall be pledged for the punctual payment of the Notes. An escrow account may be established, at the option of the Unit of Government into which the revenues from the Replacement Tax, less the amount of such revenues which the Unit of Government is required by Section 12 of "An Act in relation to State revenue sharing with local government entities", approved July 31, 1969, as amended, to set aside for the payment of the proportional amount of debt service and pension or retirement obligations, shall be deposited immediately upon collection and receipt by the Unit of Government. The escrow account may not be commingled with any other account or fund of the Unit of Government, and shall be reserved exclusively for the payment of the Notes and interest thereon. Any revenues collected in excess of those required to repay the Notes and interest thereon in full shall be used for the purposes of the fund for which the Notes had been levied. The Notes shall be payable as follows:

(1) First, to the extent possible, the Notes shall be payable from the Replacement Tax anticipated by the Notes.

(2) Second, the Notes shall be payable, if necessary, from the proceeds of Notes issued to anticipate a subsequent year's or years' Entitlement(s).

(3) Third, the Notes shall be payable, if necessary, from any other available funds of the Unit of Government at the time payment is due on the Notes.

(4) Fourth, the Notes shall be payable, if necessary, from the levy of taxes, without limitation as to rate or amount, on all the taxable property situated within the Unit of Government. Such levy shall be made only at such time as it appears, in the absolute discretion of the Governing Body, to be necessary to avoid a default on the notes. Warrants or notes may be issued against such tax levy, as provided by other laws of the State for the issuance thereof, so as to assure the timely availability of funds to pay the Notes.

(5) Whenever funds are used to pay Notes under paragraphs (3) or (4) of this subsection, such funds shall be considered an advance without interest or penalty against all of the next available Replacement Taxes, for as many years as may be, and when received such Replacement Taxes shall be used as follows:

(i) for an advance made under paragraph 3 of this subsection the advance shall be repaid to the fund from which made, and (ii) for an advance under paragraph 4, the advance shall be used first, to abate the tax levied to make such advance, to the extent possible, and second, to abate taxes levied for general or corporate purposes of any kind.

The Treasurer of a Unit of Government shall be required to keep a record in accordance with good accounting practice of advances made under paragraphs (3) and (4) hereof, and of the repayment of such advances.

(6) In the event any court of competent jurisdiction shall adjudge that Notes may not be repaid from the sources set forth in paragraphs (1), (2), (3) and/or (4) of this subsection, such judgment shall not affect either the validity of the Notes or the repayment thereof under any other of subsections 1, 2, 3 and/or 4 of this subsection not affected by such judgment, it being hereby declared that such means of repayment are severable from one another.

(7) The Governing Body of school districts or community college districts in cities having a population exceeding 500,000 shall demand and direct the city council of such city to provide by ordinance for any levy provided for herein, and such city council is hereby authorized to adopt such ordinance.

(i) Other Terms of Notes. Repayment of the Notes shall be made quarterly within 10 days of receipt of the quarterly distribution by the issuer, except that no such payment shall be made until the amount has been set aside for payment of the proportionate amount of debt service and pension or retirement obligations as required by Section 12 of "An Act in relation to State revenue sharing with local government entities", approved July 31, 1969, as amended. The Notes may be issued upon such other terms, including without limitation, terms of call and redemption, exchange, denomination, whether by public or privately negotiated sale, type of execution (provided that at least one signature thereon shall be manual), the provision for any trust or indenture for the further securing of Notes, and the place or places of payment of Notes, as shall be determined by the Governing Body.

(j) Statutory Limitations as to Debt -Home Rule Units. The Notes may be issued in excess of any statutory limitation as to debt and shall not operate to reduce the debt incurring power otherwise authorized for any such Unit of Government. This Act shall not be construed to limit in any manner any power or authority or the amount of debt which home rule units may incur under Sections 6(a), (j) or (k) of Article VII of the Constitution of the State of Illinois nor shall this Act be construed as requiring a referendum to incur such debt.

(k) Authority for Issuance of Notes. This Section, without reference to any other statute, shall be deemed full and complete authority for the issuance of the Notes as hereinabove provided and shall be construed as an additional or alternate method thereof.

(Source: P.A. 84-953.)

(50 ILCS 420/5) (from Ch. 85, par. 825)

Sec. 5. From and after the Notes have been issued as provided for by this Act, while the Notes are outstanding, it shall be the duty of the county clerk, in computing the tax rate for the specific funds for which Notes authorized by this Act were issued, to reduce the rate for such specific fund by the percent necessary to produce an amount to pay the principal, interest thereon and costs of issuance thereof on the Notes authorized by this Act for said specific fund. Whenever the Unit of Government has established a working cash fund, as provided by law, the tax rate shall not be reduced below the amount necessary to reimburse any money borrowed from the working cash fund. It shall be the duty of the Clerk, or Secretary of the Unit of Government annually, not less than thirty days prior to the tax extension date, to certify to the County Clerk the amount of money borrowed from the working cash fund to be reimbursed from the specific tax levy. No reimbursement shall be made to the working cash fund until there has been accumulated from the tax levy to pay the Notes in an amount sufficient to pay the principal of and interest on the Notes to maturity. At such time as there are no Notes outstanding, all proceeds of such levy shall be applied for the specific purpose or purposes for which the Notes were issued.

(Source: P.A. 84-953.)

(50 ILCS 420/6) (from Ch. 85, par. 826)

Sec. 6. The Notes shall be executed in the name of the Unit of Government by manual or facsimile signatures of such officials of the Unit of Government as may be designated by the ordinance (or resolution where appropriate). At least one signature on each Note shall be a manual signature.

(Source: P.A. 77-2125.)

(50 ILCS 420/7) (from Ch. 85, par. 827)

Sec. 7. The Notes may be issued in excess of any statutory limitation as to debt and shall not operate to reduce the debt incurring power otherwise authorized for any such unit of government. This Act shall not be construed to limit in any manner the amount of debt which home rule units may incur under Sections 6 (a), (j) or (k) of Article VII of the Constitution of the State of Illinois nor shall this Act be construed as requiring a referendum to incur such debt.

(Source: P.A. 77-2125.)

(50 ILCS 420/8) (from Ch. 85, par. 828)

Sec. 8. This Act without reference to any other statute, shall be deemed full and complete authority for the issuance of the Notes as hereinabove provided and shall be construed as an additional or alternate method thereof.

(Source: P.A. 77-2125.)

(50 ILCS 420/9) (from Ch. 85, par. 829)

Sec. 9. If any Section, sentence, or clause of this Act is for any reason held invalid or to be unconstitutional, such decision shall not affect the validity of the remaining portions of this Act.

(Source: P.A. 77-2125.)