Full Text of HB0983 98th General Assembly
HB0983enr 98TH GENERAL ASSEMBLY |
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| 1 | | AN ACT concerning local government.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 5. The Local Government Debt Reform Act is amended | 5 | | by changing Section 15 as follows:
| 6 | | (30 ILCS 350/15) (from Ch. 17, par. 6915)
| 7 | | Sec. 15. Double-barrelled bonds. Whenever revenue bonds | 8 | | have been
authorized to be issued pursuant to applicable law or | 9 | | whenever there exists
for a governmental unit a revenue source, | 10 | | the procedures set forth in this
Section may be used by a | 11 | | governing body. General obligation bonds may be
issued in lieu | 12 | | of such revenue bonds as authorized, and general obligation
| 13 | | bonds may be issued payable from any revenue source. Such | 14 | | general
obligation bonds may be referred to as "alternate | 15 | | bonds". Alternate bonds
may be issued without any referendum or | 16 | | backdoor referendum except as
provided in this Section, upon | 17 | | the terms provided in Section 10 of this Act
without reference | 18 | | to other provisions of law, but only upon the conditions
| 19 | | provided in this Section. Alternate bonds shall not be regarded | 20 | | as or
included in any computation of indebtedness for the | 21 | | purpose of any
statutory provision or limitation except as | 22 | | expressly provided in this Section.
| 23 | | Such conditions are:
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| 1 | | (a) Alternate bonds shall be issued for a lawful
corporate | 2 | | purpose. If issued in lieu of revenue bonds, alternate bonds
| 3 | | shall be issued for the purposes for which such revenue bonds | 4 | | shall have
been authorized. If issued payable from a revenue | 5 | | source in the manner
hereinafter provided, which revenue source | 6 | | is limited in its purposes or
applications, then the alternate | 7 | | bonds shall be issued only for such
limited purposes or | 8 | | applications. Alternate bonds may be issued payable
from either | 9 | | enterprise revenues or revenue sources, or both.
| 10 | | (b) Alternate bonds shall be subject to backdoor | 11 | | referendum. The
provisions of Section 5 of this Act shall apply | 12 | | to such backdoor
referendum, together with the provisions | 13 | | hereof. The authorizing ordinance
shall be published in a | 14 | | newspaper of general circulation in the
governmental unit. | 15 | | Along with or as part of the authorizing ordinance,
there shall | 16 | | be published a notice of (1) the specific number of voters
| 17 | | required to sign a petition requesting that the issuance of the | 18 | | alternate
bonds be submitted to referendum, (2) the time when | 19 | | such petition must
be filed, (3) the date of the prospective | 20 | | referendum, and
(4), with respect to authorizing ordinances | 21 | | adopted on or after January 1,
1991, a statement that | 22 | | identifies any revenue source that will be used to
pay debt | 23 | | service on the alternate bonds.
The clerk or
secretary of the | 24 | | governmental unit shall make a petition form available to
| 25 | | anyone requesting one. | 26 | | Except as provided in the following paragraph, if If no |
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| 1 | | petition is filed with the clerk or secretary
within 30 days of | 2 | | publication of the authorizing ordinance and notice, the
| 3 | | alternate bonds shall be authorized to be issued. But if within | 4 | | this 30
days period, a petition is filed with such clerk or | 5 | | secretary signed by
electors numbering the greater of (i) 7.5% | 6 | | of the registered
voters in the governmental unit or (ii) 200 | 7 | | of those registered voters or
15% of those registered voters, | 8 | | whichever is less,
asking that the issuance of such alternate | 9 | | bonds be submitted to
referendum, the clerk or secretary shall | 10 | | certify such question for
submission at an election held in | 11 | | accordance with the general election law.
| 12 | | Notwithstanding the previous paragraph, in governmental | 13 | | units with fewer than 500,000 inhabitants that propose to issue | 14 | | alternate bonds payable solely from enterprise revenues as | 15 | | defined under Section 3 of this Act, except for such alternate | 16 | | bonds that finance or refinance projects concerning public | 17 | | utilities, public streets and roads or public safety | 18 | | facilities, and related infrastructure and equipment, if no | 19 | | petition is filed with the clerk or secretary
within 45 days of | 20 | | publication of the authorizing ordinance and notice, the
| 21 | | alternate bonds shall be authorized to be issued. But if, | 22 | | within this 45-day period, a petition is filed with such clerk | 23 | | or secretary signed by the necessary number of electors, asking | 24 | | that the issuance of such alternate bonds be submitted to
| 25 | | referendum, the clerk or secretary shall certify such question | 26 | | for
submission at an election held in accordance with the |
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| 1 | | general election law. For purposes of this paragraph, the | 2 | | necessary number of electors for a governmental unit with more | 3 | | than 4,000 registered voters is the lesser of (i) 5% of the | 4 | | registered voters or (ii) 5,000 registered voters; and the | 5 | | necessary number of electors for a governmental unit with 4,000 | 6 | | or fewer registered voters is the lesser of (i) 15% of the | 7 | | registered voters or (ii) 200 registered voters. | 8 | | The question on the ballot shall include a statement of any
| 9 | | revenue source that will be used to pay debt service on
the | 10 | | alternate bonds. The alternate bonds shall be authorized to be | 11 | | issued
if a majority of the votes cast on the question at such | 12 | | election are in
favor thereof
provided that notice of the bond | 13 | | referendum, if held before July 1, 1999,
has been given in | 14 | | accordance with the provisions of Section
12-5
of the Election | 15 | | Code
in effect at the time of the bond referendum, at least 10 | 16 | | and not more than
45 days before the date of
the election, | 17 | | notwithstanding the time for publication otherwise imposed by
| 18 | | Section 12-5.
Notices required in connection with the | 19 | | submission of public questions
on or after July 1, 1999 shall | 20 | | be as set forth in Section 12-5 of the Election
Code.
Backdoor | 21 | | referendum proceedings for bonds and alternate
bonds to be | 22 | | issued in lieu of such bonds may be conducted at the same time.
| 23 | | (c) To the extent payable from enterprise revenues, such | 24 | | revenues shall
have been determined by the governing body to be | 25 | | sufficient to provide for
or pay in each year to final maturity | 26 | | of such alternate bonds all of the
following: (1) costs of |
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| 1 | | operation and maintenance of the utility or
enterprise, but not | 2 | | including depreciation, (2) debt service on all
outstanding | 3 | | revenue bonds payable from such enterprise revenues, (3) all
| 4 | | amounts required to meet any fund or account requirements with | 5 | | respect to
such outstanding revenue bonds, (4) other | 6 | | contractual or tort liability
obligations, if any, payable from | 7 | | such enterprise revenues, and (5) in each
year, an amount not | 8 | | less than 1.25 times debt service of all (i) alternate
bonds | 9 | | payable from such enterprise revenues previously issued and
| 10 | | outstanding and (ii) alternate bonds proposed to be issued.
To | 11 | | the extent
payable from one or more revenue sources, such | 12 | | sources shall have been
determined by the governing body to | 13 | | provide in each year, an amount not
less than 1.25 times debt | 14 | | service of all alternate bonds payable from such
revenue | 15 | | sources previously issued and outstanding and alternate bonds
| 16 | | proposed to be issued.
The 1.25 figure in the preceding | 17 | | sentence shall be reduced to 1.10 if the
revenue source is a | 18 | | governmental revenue source.
The conditions enumerated in this | 19 | | subsection (c)
need not be met for that amount of debt service | 20 | | provided for by the setting
aside of proceeds of bonds or other | 21 | | moneys at the time of the delivery of
such bonds.
| 22 | | (c-1) In the case of alternate bonds issued as variable | 23 | | rate bonds
(including
refunding bonds), debt service shall be | 24 | | projected based on the rate for the
most recent
date shown in | 25 | | the 20 G.O. Bond Index of average municipal bond yields as
| 26 | | published in
the most recent edition of The Bond Buyer |
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| 1 | | published in New York, New York (or
any
successor publication | 2 | | or index, or if such publication or index is no longer
| 3 | | published,
then any index of long-term municipal tax-exempt | 4 | | bond yields selected by the
governmental unit), as of the date | 5 | | of determination referred to in subsection (c) of this
Section. | 6 | | Any interest or fees that may be payable to the provider of a | 7 | | letter of credit, line
of credit, surety bond, bond insurance, | 8 | | or other credit enhancement relating to such
alternate bonds | 9 | | and any fees that may be payable to any remarketing agent need | 10 | | not be
taken into account for purposes of such projection. If | 11 | | the governmental unit enters into
an agreement in connection | 12 | | with such alternate bonds at the time of issuance
thereof
| 13 | | pursuant to which the governmental unit agrees for a specified | 14 | | period of time
to pay an
amount calculated at an agreed-upon | 15 | | rate or index based on a notional amount
and the other party | 16 | | agrees to pay the governmental unit an amount calculated at
an | 17 | | agreed-upon rate or index based on such notional amount, | 18 | | interest
shall be projected for such specified period of time | 19 | | on the basis of the
agreed-upon rate
payable by the | 20 | | governmental unit.
| 21 | | (d) The determination of the sufficiency of enterprise | 22 | | revenues or a
revenue source, as applicable, shall be supported | 23 | | by reference to the most
recent audit of the governmental unit, | 24 | | which shall be for a fiscal year
ending not earlier than 18 | 25 | | months previous to the time of issuance of the
alternate bonds. | 26 | | If such audit does not adequately show such enterprise
revenues |
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| 1 | | or revenue source, as applicable, or if such enterprise | 2 | | revenues
or revenue source, as applicable, are shown to be | 3 | | insufficient, then the
determination of sufficiency shall be | 4 | | supported by the report of an
independent accountant or | 5 | | feasibility analyst, the latter having a national
reputation
| 6 | | for expertise in such matters, who is not otherwise involved in | 7 | | the project being financed or refinanced with the proceeds of | 8 | | the alternate bonds, demonstrating the sufficiency of such
| 9 | | revenues and explaining, if appropriate, by what means the | 10 | | revenues will be
greater than as shown in the audit. Whenever | 11 | | such sufficiency is
demonstrated by reference to a schedule of | 12 | | higher rates or charges for
enterprise revenues or a higher tax | 13 | | imposition for a revenue source, such
higher rates, charges or | 14 | | taxes shall have been properly imposed by an
ordinance adopted | 15 | | prior to the time of delivery of alternate bonds. The
reference | 16 | | to and acceptance of an audit or report, as the case may be, | 17 | | and
the determination of the governing body as to sufficiency | 18 | | of enterprise
revenues or a revenue source shall be conclusive | 19 | | evidence that the
conditions of this Section have been met and | 20 | | that the alternate bonds
are valid.
| 21 | | (e) The enterprise revenues or revenue source, as | 22 | | applicable, shall be
in fact pledged to the payment of the | 23 | | alternate bonds; and the governing
body shall covenant, to the | 24 | | extent it is empowered to do so, to provide
for, collect and | 25 | | apply such enterprise revenues or revenue source, as
| 26 | | applicable, to the payment of the alternate bonds and the |
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| 1 | | provision of
not less than an additional .25 (or .10 for | 2 | | governmental revenue sources)
times debt service. The pledge | 3 | | and
establishment of rates or charges for enterprise revenues, | 4 | | or the
imposition of taxes in a given rate or amount, as | 5 | | provided in this Section
for alternate bonds, shall constitute | 6 | | a continuing obligation of the
governmental unit with respect | 7 | | to such establishment or imposition and a
continuing | 8 | | appropriation of the amounts received. All covenants relating
| 9 | | to alternate bonds and the conditions and obligations imposed | 10 | | by this
Section are enforceable by any bondholder of alternate | 11 | | bonds affected, any
taxpayer of the governmental unit, and the | 12 | | People of the State of Illinois
acting through the Attorney | 13 | | General or any designee, and in the event that
any such action | 14 | | results in an order finding that the governmental unit has
not | 15 | | properly set rates or charges or imposed taxes to the extent it | 16 | | is
empowered to do so or collected and applied enterprise | 17 | | revenues or any
revenue source, as applicable, as required by | 18 | | this Act, the plaintiff in
any such action shall be awarded | 19 | | reasonable attorney's fees. The intent is
that such enterprise | 20 | | revenues or revenue source, as applicable, shall be
sufficient | 21 | | and shall be applied to the payment of debt service on such
| 22 | | alternate bonds so that taxes need not be levied, or if levied | 23 | | need not be
extended, for such payment. Nothing in this Section | 24 | | shall inhibit or
restrict the authority of a governing body to | 25 | | determine the lien priority
of any bonds, including alternate | 26 | | bonds, which may be issued with respect
to any enterprise |
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| 1 | | revenues or revenue source.
| 2 | | In the event that alternate bonds shall have been issued | 3 | | and taxes, other
than a designated revenue source, shall have | 4 | | been extended pursuant to the
general obligation, full faith | 5 | | and credit promise supporting such alternate
bonds, then the | 6 | | amount of such alternate bonds then outstanding shall be
| 7 | | included in the computation of indebtedness of the governmental | 8 | | unit for
purposes of all statutory provisions or limitations | 9 | | until such time as an
audit of the governmental unit shall show | 10 | | that the alternate bonds have
been paid from the enterprise | 11 | | revenues or revenue source, as applicable,
pledged thereto for | 12 | | a complete fiscal year.
| 13 | | Alternate bonds may be issued to refund or advance refund | 14 | | alternate bonds
without meeting any of the conditions set forth | 15 | | in this Section, except
that the term of the refunding bonds | 16 | | shall not be longer than the term of
the refunded bonds and | 17 | | that the debt service payable in any year on the
refunding | 18 | | bonds shall not exceed the debt service payable in such year on
| 19 | | the refunded bonds.
| 20 | | Once issued, alternate bonds shall be and forever remain | 21 | | until paid or
defeased the general obligation of the | 22 | | governmental unit, for the payment
of which its full faith and | 23 | | credit are pledged, and shall be payable from
the levy of taxes | 24 | | as is provided in this Act for general obligation bonds.
| 25 | | The changes made by this amendatory Act of 1990 do not | 26 | | affect the
validity of bonds authorized before September 1, |
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| 1 | | 1990.
| 2 | | (Source: P.A. 97-542, eff. 8-23-11.)
| 3 | | Section 99. Effective date. This Act takes effect January | 4 | | 1, 2014.
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