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|[ House Amendment 002 ]||[ House Amendment 003 ]||[ Senate Amendment 001 ]|
92_SB2241ham001 LRB9216107SMcdam01 1 AMENDMENT TO SENATE BILL 2241 2 AMENDMENT NO. . Amend Senate Bill 2241 on page 1, by 3 replacing line 1 with the following: 4 "AN ACT concerning health and human services providers."; 5 and 6 on page 1, immediately below line 3, by inserting the 7 following: 8 "Section 3. The Illinois Health Facilities Authority Act 9 is amended by changing Sections 2.06, 4.06, and 11 and by 10 adding Sections 17.1, 17.2, 17.3, 17.4, 17.5, 17.6, 17.7, 11 17.8, 17.9, and 17.10 as follows: 12 (20 ILCS 3705/2.06) (from Ch. 111 1/2, par. 1102.06) 13 Sec. 2.06. Bonds. "Bonds" means bonds, notes and bond 14 anticipation notes and any other evidences of indebtedness of 15 the Authority issued under this Act, including refunding 16 bonds and bonds issued under Section 17.3. 17 (Source: P.A. 85-1173.) 18 (20 ILCS 3705/4.06) (from Ch. 111 1/2, par. 1104.06) 19 Sec. 4.06. Issuance of bonds. To issue bonds of the 20 Authority for any of its corporate purposes and in such -2- LRB9216107SMcdam01 1 amounts as it deems necessary and to fund or refund the same 2 all as provided in this Act, and with respect to bonds issued 3 under Section 17.3, subject to the requirements of Sections 4 17.1 through 17.10. 5 (Source: P.A. 77-2635.) 6 (20 ILCS 3705/11) (from Ch. 111 1/2, par. 1111) 7 Sec. 11. Bonds; liability of State and political 8 subdivisions. 9 (a) Bonds issued under the provisions of this Act shall 10 not be deemed to constitute a debt or liability of the State 11 or of any political subdivision thereof other than the 12 Authority or a pledge of the faith and credit of the State or 13 of any such political subdivision other than the Authority, 14 but shall be payable solely from the funds herein provided 15 therefor. The issuance of bonds under the provisions of this 16 Act shall not, directly or indirectly or contingently, 17 obligate the State or any political subdivision thereof to 18 levy any form of taxation therefor or to make any 19 appropriation for their payment. Nothing in this Section 20 contained shall prevent or be construed to prevent the 21 Authority from pledging its full faith and credit or the full 22 faith and credit of a health institution to the payment of 23 bonds authorized pursuant to this Act. Nothing in this Act 24 shall be construed to authorize the Authority to create a 25 debt of the State within the meaning of the Constitution or 26 Statutes of Illinois and all bonds issued by the Authority 27 pursuant to the provisions of this Act are payable and shall 28 state that they are payable solely from the funds pledged for 29 their payment in accordance with the resolution authorizing 30 their issuance or in any trust indenture or mortgage or deed 31 of trust executed as security therefor. The State shall not 32 in any event be liable for the payment of the principal of or 33 interest on any bonds of the Authority or for the performance -3- LRB9216107SMcdam01 1 of any pledge, mortgage, obligation or agreement of any kind 2 whatsoever which may be undertaken by the Authority. No 3 breach of any such pledge, mortgage, obligation or agreement 4 may impose any pecuniary liability upon the State or any 5 charge upon its general credit or against its taxing power. 6 (b) The provisions of subsection (a) do not apply to 7 bonds issued under Section 17.3, the nature of which are as 8 described in Section 17.6. 9 (Source: P.A. 77-2635.) 10 (20 ILCS 3705/17.1 new) 11 Sec. 17.1. Financially distressed provider refunding bond 12 program; findings and declaration of policy. The General 13 Assembly finds and declares that health care and human 14 services providers in the State of Illinois are currently 15 experiencing serious and sustained financial problems. These 16 financial problems are most severe for a group of health and 17 human services providers who receive significant amounts of 18 funding from the State of Illinois and for a group of health 19 care providers who serve a predominantly indigent patient 20 population in areas of critical need throughout the State of 21 Illinois. The financial difficulties being experienced by 22 this group of health and human services providers has been 23 significantly worsened as a result of failure by the State of 24 Illinois to provide adequate funding to support essential 25 programs and services and by the State's failure to make 26 timely payment of amounts appropriated for payment to these 27 providers. These institutions provide essential human 28 services for the people of the State of Illinois. The ability 29 of these entities effectively to carry out their mission and 30 to provide these essential services, however, is being 31 significantly hampered by these financial problems. It is 32 therefore essential that the State of Illinois provide a 33 financing mechanism to permit this group of providers to -4- LRB9216107SMcdam01 1 refinance, at a significantly reduced rate of interest, 2 outstanding indebtedness previously issued for the purpose of 3 financing or refinancing costs of acquiring, constructing, 4 enlarging, remodeling, renovating, improving, furnishing, or 5 equipping a health facility. Use of such a financing 6 mechanism will permit these providers to realize significant 7 debt service savings, which can be applied to providing 8 expanded and improved health and human services to the 9 neediest residents of the State of Illinois. Establishing a 10 program is therefore declared to be in the public interest 11 and for the public benefit. 12 (20 ILCS 3705/17.2 new) 13 Sec. 17.2. Definitions. The following words or terms, 14 whenever used or referred to in Sections 17.1 through 17.9, 15 have the following meanings ascribed to them, except where 16 the context clearly requires otherwise: 17 (a) "Costs of issuance" means all reasonable costs 18 incurred in connection with the issuance of the bonds 19 including, but not limited to, legal and accounting fees and 20 expenses, printing expenses, financial consultants' fees, 21 financing charges (including underwriting and placement fees 22 and discounts), printing costs, costs incurred in connection 23 with public approvals, fees and expenses associated with 24 obtaining a rating on the bonds, costs for the preparation of 25 any disclosure document and other documents necessary for the 26 issuance of the bonds, and fees of trustees, paying agents, 27 and other fiduciaries. 28 (b) "Director" means Director of the Bureau of the 29 Budget. 30 (c) "Financially Distressed Provider Credit Enhancement 31 Fund" means the special fund created in the State treasury 32 under the State Finance Act. 33 (d) "Minimum required debt service savings" means net -5- LRB9216107SMcdam01 1 present value savings, after payment of costs of issuance, 2 paid by, on behalf of, or with respect to any qualifying 3 provider of at least 3%. The amount of the costs of issuance 4 properly allocated as paid by, on behalf of, or with respect 5 to any qualifying provider shall be determined by the 6 Authority, with the written concurrence of the Director. 7 (e) "Qualifying provider" means a participating health 8 institution that is either: (i) certified as a provider under 9 the Critical Access Hospital program or (ii) demonstrates, to 10 the reasonable written satisfaction of the Director, that, 11 for its last 3 fiscal years for which audited financial 12 statements have been prepared, State funding accounted for an 13 annual average of at least 40% of its operating revenues. 14 (f) "Refinance" or "refinancing" means refunding of any 15 outstanding bonds, notes, or other indebtedness of a 16 qualifying provider, whether or not that indebtedness has 17 previously been issued to the Authority, whether or not 18 interest on that indebtedness is exempt from federal income 19 taxation, and regardless of the remaining term to maturity of 20 that indebtedness. 21 (g) "State agency" means the Department of Public Aid, 22 the Department of Public Health, the Department of Children 23 and Family Services, the Department of Human Services, and 24 any other department or agency of State government that 25 enters into contracts with health institutions under which 26 the institution is paid or reimbursed by the State for 27 providing health or human services to persons in Illinois. 28 (h) "State funding" means funds received from any State 29 agency. 30 (20 ILCS 3705/17.3 new) 31 Sec. 17.3. Issuance of bonds. On application of a 32 qualifying provider, the Authority may issue its bonds solely 33 for the purpose of enabling that qualifying provider to -6- LRB9216107SMcdam01 1 refinance all or a portion of its outstanding indebtedness. 2 Bonds shall be issued by the Authority under this Section 3 only in accordance with the following requirements: 4 (1) Bonds shall be issued only for the purpose of 5 refinancing outstanding indebtedness of a qualifying provider 6 that was previously issued to finance or refinance the cost 7 of a health facility (but not including working capital, 8 accounts receivable, and operating expenses). 9 (2) Bonds shall be issued only if the Director, in 10 consultation with the Authority, determines that as a result 11 of the refinancing: (i) the qualifying provider will realize 12 minimum required debt service savings or (ii) the qualifying 13 provider will realize significant economic or financial 14 advantages that will enable it to more effectively provide 15 health care or other human services to the people of the 16 State of Illinois. 17 (3) The Authority may issue bonds for any individual 18 qualified provider or may issue a single bond issue for a 19 group of qualified providers. The Authority shall make that 20 determination only with the written concurrence of the 21 Director. The Authority and the Director are encouraged to 22 consider issuance of a single bond issue for a group of 23 qualified providers as a means of reducing costs of issuance 24 and providing greater net financial and economic benefits to 25 qualifying providers. Any single bond issue for a group of 26 qualified providers is subject to all requirements for bond 27 issues as established by this Act. 28 (20 ILCS 3705/17.4 new) 29 Sec. 17.4. Limitation on authorization. 30 (a) The Authority may issue bonds under Section 17.3 in 31 an aggregate principal amount not to exceed $300,000,000. 32 (b) Bonds may be issued under Section 17.3 on or before 33 June 30, 2003. No bonds may be issued under Section 17.3 on -7- LRB9216107SMcdam01 1 or after July 1, 2003. The final maturity date of bonds 2 issued under Section 17.3 may be no later than January 1, 3 2024. 4 (c) Bonds may be issued by the Authority under Section 5 17.3 only after consultation with and upon receipt of the 6 written concurrence of the Director. 7 (d) The maximum amount of proceeds of bonds under 8 Section 17.3 to be loaned to, or otherwise made available for 9 the benefit of, any individual qualifying provider may not 10 exceed $50,000,000. For purposes of this subsection, proceeds 11 of bonds used to pay costs of issuance paid by, on behalf of, 12 or with respect to any qualifying provider shall not be 13 included. The amount of costs of issuance properly allocated 14 as paid by, on behalf of, or with respect to any qualifying 15 provider shall be determined by the Authority, with the 16 written concurrence of the Director. 17 (e) Unless specifically approved in writing by the 18 Director, costs of issuance for each issue of bonds may not 19 exceed one and one-half percent of the principal amount of 20 the proceeds of sale of each issue of bonds. 21 (f) If any bonds are to be sold by negotiated sale, the 22 Authority, in consultation with the Director, must comply 23 with the competitive request for proposal process set forth 24 in the Illinois Procurement Code and all other applicable 25 requirements of that Code. 26 (g) Before the issuance of bonds for the benefit of a 27 qualified provider, that qualified provider must enter into 28 an agreement with the Authority, the Director, and any 29 applicable State agency pursuant to which the qualified 30 provider agrees, among other matters, that if amounts are 31 withdrawn from the debt service reserve fund established 32 under Section 17.5 as a result of the failure of that 33 qualified provider to make timely repayment to the Authority 34 of bond proceeds loaned to, or otherwise made available for -8- LRB9216107SMcdam01 1 the benefit of, that qualified provider, the State agency 2 shall be permitted to direct the payment of any money that is 3 otherwise due and payable to the qualified provider, up to 4 the maximum amount of that withdrawal from the debt service 5 reserve fund, into the Financially Distressed Provider Credit 6 Enhancement Fund. 7 (20 ILCS 3705/17.5 new) 8 Sec. 17.5. Debt service reserve funds. 9 (a) In connection with the issuance of each series of 10 bonds, the Authority must create and establish a debt service 11 reserve fund to be maintained by a trustee, separate and 12 segregated from all other funds and accounts of the 13 Authority. The Authority may, however, in consultation with 14 the Director, establish one debt service reserve fund for the 15 benefit of 2 or more series of bonds. The amounts required to 16 be on deposit in a debt service reserve fund shall be 17 determined by the Authority, in consultation with and upon 18 the written concurrence of the Director, and shall be 19 specified in the resolution or indenture securing the bonds. 20 Any reserve fund established under this Section shall be 21 initially funded from bond proceeds and other moneys lawfully 22 available to the Authority. 23 (b) If moneys are withdrawn from any debt service 24 reserve fund established under subsection (a), the trustee 25 shall immediately notify the Chairman of the Authority, who 26 shall in turn immediately notify the Director, the State 27 Comptroller, and the State Treasurer of the amount of that 28 withdrawal. Upon receipt of the notification, the State 29 Comptroller and the State Treasurer shall immediately 30 transfer from the Financially Distressed Provider Credit 31 Enhancement Fund to, or at the direction of, the Authority 32 for deposit into the debt service reserve fund the amount 33 required to restore that debt service reserve fund to the -9- LRB9216107SMcdam01 1 level of the debt service reserve requirement specified in 2 the resolution or indenture securing the bonds. 3 (c) This Section constitutes an irrevocable and 4 continuing appropriation from the Financially Distressed 5 Provider Credit Enhancement Fund to any debt service reserve 6 fund established under subsection (a) of all amounts 7 necessary for that purpose and the irrevocable and continuing 8 authority for and direction to the State Treasurer and the 9 State Comptroller to make those transfers and deposits. 10 (20 ILCS 3705/17.6 new) 11 Sec. 17.6. Nature of bonds. All bonds issued under 12 Section 17.3 shall be limited obligations of the State of 13 Illinois payable from: (i) amounts transferred from the 14 Financially Distressed Provider Credit Enhancement Fund to 15 the debt service reserve fund established under Section 17.5 16 and (ii) amounts in any fund or account maintained pursuant 17 to any indenture or resolution securing those bonds to the 18 extent provided in the indenture or resolution. The bonds are 19 not general obligations of the State of Illinois and are not 20 secured by the full faith and credit of the State of 21 Illinois, and the holders of the bonds may not require the 22 levy or imposition of any taxes or the application of State 23 revenues, other than amounts transferred from the Financially 24 Distressed Provider Credit Enhancement Fund to the debt 25 service reserve fund established under Section 17.5, to the 26 payment of the bonds. Each bond shall describe the limited 27 nature of the State's obligation on the face of the bond. 28 (20 ILCS 3705/17.7 new) 29 Sec. 17.7. Actions to compel payment. If the State fails 30 to transfer required amounts from the Financially Distressed 31 Provider Credit Enhancement Fund to a debt service reserve 32 fund, as provided in Section 17.5, or from the Tobacco -10- LRB9216107SMcdam01 1 Settlement Recovery Fund to the Financially Distressed 2 Provider Credit Enhancement Fund, as provided in Section 3 6z-43 of the State Finance Act, a civil action to compel that 4 transfer may be instituted in the Circuit Court of Sangamon 5 County by the holder or holders of the bonds issued under 6 Section 17.3. Delivery of a summons and a copy of the 7 complaint to the Attorney General constitutes sufficient 8 service to give the Circuit Court of Sangamon County 9 jurisdiction of the subject matter of such a suit and 10 jurisdiction over the State and its officers named as 11 defendants for the purpose of compelling the transfer. 12 (20 ILCS 3705/17.8 new) 13 Sec. 17.8. Covenants with bondholders. The State of 14 Illinois irrevocably covenants and agrees with the holders of 15 bonds issued under Section 17.3 that the State will not alter 16 or limit: (i) the basis on which transfers are required to be 17 made from the Tobacco Settlement Recovery Fund to the 18 Distressed Provider Credit Enhancement Fund, pursuant to 19 Section 6z-43 of the State Finance Act; (ii) the basis on 20 which transfers are required to be made from the Distressed 21 Provider Credit Enhancement Fund to either the debt service 22 reserve fund established under Section 17.5 or to the Tobacco 23 Settlement Recovery Fund; or (iii) the provisions of this Act 24 or the State Finance Act so as to impair, in any of the 25 foregoing respects, the obligations of contract incurred in 26 favor of the holders of bonds issued under Section 17.3. The 27 covenant and agreement set forth in this Section may be 28 included in a trust indenture, resolution, or bond issued 29 under Section 17.3. 30 (20 ILCS 3705/17.9 new) 31 Sec. 17.9. Tax exemption. The exercise of the powers 32 granted in Sections 17.1 through 17.10 are in all respects -11- LRB9216107SMcdam01 1 for the benefit of the people of Illinois. In consideration 2 of that benefit, the bonds issued under Section 17.3 and the 3 income from those bonds are free from all taxation by the 4 State or its political subdivisions, except for estate, 5 transfer, and inheritance taxes. For purposes of Section 250 6 of the Illinois Income Tax Act, the exemption of the income 7 from bonds issued under those Sections terminates after all 8 of the bonds have been fully paid. The amount of that income 9 to be added to and then subtracted from federal adjusted 10 gross income or federal taxable income on the Illinois income 11 tax return of a taxpayer, as provided in Section 203 of the 12 Illinois Income Tax Act, in computing Illinois base income 13 shall be the interest net of any bond premium amortization. 14 (20 ILCS 3705/17.10 new) 15 Sec. 17.10. Generally applicable provisions. Except as 16 specifically provided for in Sections 17.1 through 17.9, all 17 bonds issued under Section 17.3 are subject to this Act in 18 the same manner and to the same extent as other bonds issued 19 under this Act. 20 Section 4. The State Finance Act is amended by changing 21 Section 6z-43 and by adding Sections 5.570 and 8.45 as 22 follows: 23 (30 ILCS 105/5.570 new) 24 Sec. 5.570. The Financially Distressed Provider Credit 25 Enhancement Fund. 26 (30 ILCS 105/6z-43) 27 Sec. 6z-43. Tobacco Settlement Recovery Fund. 28 (a) There is created in the State Treasury a special 29 fund to be known as the Tobacco Settlement Recovery Fund, 30 into which shall be deposited all monies paid to the State -12- LRB9216107SMcdam01 1 pursuant to (1) the Master Settlement Agreement entered in 2 the case of People of the State of Illinois v. Philip Morris, 3 et al. (Circuit Court of Cook County, No. 96-L13146) and (2) 4 any settlement with or judgment against any tobacco product 5 manufacturer other than one participating in the Master 6 Settlement Agreement in satisfaction of any released claim as 7 defined in the Master Settlement Agreement, as well as any 8 other monies as provided by law. All earnings on Fund 9 investments shall be deposited into the Fund. Upon the 10 creation of the Fund, the State Comptroller shall order the 11 State Treasurer to transfer into the Fund any monies paid to 12 the State as described in item (1) or (2) of this Section 13 before the creation of the Fund plus any interest earned on 14 the investment of those monies. The Treasurer may invest the 15 moneys in the Fund in the same manner, in the same types of 16 investments, and subject to the same limitations provided in 17 the Illinois Pension Code for the investment of pension funds 18 other than those established under Article 3 or 4 of the 19 Code. 20 (b) As soon as may be practical after June 30, 2001, 21 upon notification from and at the direction of the Governor, 22 the State Comptroller shall direct and the State Treasurer 23 shall transfer the unencumbered balance in the Tobacco 24 Settlement Recovery Fund as of June 30, 2001, as determined 25 by the Governor, into the Budget Stabilization Fund. The 26 Treasurer may invest the moneys in the Budget Stabilization 27 Fund in the same manner, in the same types of investments, 28 and subject to the same limitations provided in the Illinois 29 Pension Code for the investment of pension funds other than 30 those established under Article 3 or 4 of the Code. 31 (c) As soon as practical in fiscal year 2003, there 32 shall be transferred from the Tobacco Settlement Recovery 33 Fund to the Financially Distressed Provider Credit 34 Enhancement Fund an amount to be certified by the Director of -13- LRB9216107SMcdam01 1 the Bureau of the Budget to the State Treasurer and the State 2 Comptroller to be equal to: (x) the amount projected by the 3 Director to be the debt service reserve requirement to be 4 established in connection with the issuance of the maximum 5 amount of bonds authorized by Section 17.3 of the Illinois 6 Health Facilities Authority Act times (y) 1.25 (the product 7 of (x) times (y) being referred to as the "estimated 8 amount"). On June 30, 2003, the Director shall certify to the 9 State Treasurer and the State Comptroller: (i) the debt 10 service reserve requirement actually established in 11 connection with all bonds issued under Section 17.3 of the 12 Illinois Health Facilities Authority Act (referred to as the 13 "reserve requirement"); (ii) 125% of the reserve requirement; 14 and (iii) the difference between the estimated amount and the 15 amount certified under item (ii). The State Comptroller shall 16 direct and the State Treasurer shall transfer the amount 17 certified under item (iii) from the Financially Distressed 18 Provider Credit Enhancement Fund to the Tobacco Settlement 19 Recovery Fund. 20 (d) In each fiscal year, beginning with fiscal year 21 2004, there shall be transferred from the Tobacco Settlement 22 Recovery Fund for deposit into the Financially Distressed 23 Provider Credit Enhancement Fund an amount equal to the 24 reserve requirement. This transfer shall be made in each 25 fiscal year prior to any other use, transfer, or application 26 of moneys in the Tobacco Settlement Recovery Fund. This 27 Section constitutes an irrevocable and continuing 28 appropriation from the Tobacco Settlement Recovery Fund of 29 all amounts necessary for that purpose and the irrevocable 30 and continuing authority for and direction to the State 31 Treasurer and the State Comptroller to make those transfers 32 and deposits. 33 (Source: P.A. 91-646, eff. 11-19-99; 91-704, eff. 7-1-00; 34 91-797, eff. 6-9-00; 92-11, eff. 6-11-01; 92-16, eff. -14- LRB9216107SMcdam01 1 6-28-01.) 2 (30 ILCS 105/8.45 new) 3 Sec. 8.45. Financially Distressed Provider Credit 4 Enhancement Fund. 5 (a) The State Comptroller and the State Treasurer shall 6 transfer into the Financially Distressed Provider Credit 7 Enhancement Fund from the Tobacco Settlement Recovery Fund 8 all amounts required to the transferred under subsections (c) 9 and (d) of Section 6z-43. In addition, there shall be 10 deposited into the Financially Distressed Provider Credit 11 Enhancement Fund all amounts directed to be deposited into 12 that Fund under an agreement executed in accordance with the 13 provisions of subsection (g) of Section 17.4 of the Illinois 14 Health Facilities Authority Act. 15 (b) On June 30, 2004, and on each June 30 thereafter, 16 all amounts in the Financially Distressed Provider Credit 17 Enhancement Fund that are in excess of 125% of the reserve 18 requirement shall be transferred by the State Treasurer for 19 deposit into the Tobacco Settlement Recovery Fund. This 20 Section constitutes an irrevocable and continuing 21 appropriation from the Financially Distressed Provider Credit 22 Enhancement Fund of all amounts necessary for that purpose 23 and the irrevocable and continuing authority for and 24 direction to the State Treasurer and the State Comptroller to 25 make those transfers and deposits.".
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