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91_HB1117ham001
LRB9103156MWpkam
1 AMENDMENT TO HOUSE BILL 1117
2 AMENDMENT NO. . Amend House Bill 1117 by replacing
3 the title with the following:
4 "AN ACT to amend the Local Government Debt Reform Act by
5 changing Sections 15, 16, and 17 and by adding Section
6 17.5."; and
7 by replacing everything after the enacting clause with the
8 following:
9 "Section 5. The Local Government Debt Reform Act is
10 amended by changing Sections 15, 16, and 17 and by adding
11 Section 17.5 as follows:
12 (30 ILCS 350/15) (from Ch. 17, par. 6915)
13 Sec. 15. Double-barrelled bonds. Whenever revenue bonds
14 have been authorized to be issued pursuant to applicable law
15 or whenever there exists for a governmental unit a revenue
16 source, the procedures set forth in this Section may be used
17 by a governing body. General obligation bonds may be issued
18 in lieu of such revenue bonds as authorized, and general
19 obligation bonds may be issued payable from any revenue
20 source. Such general obligation bonds may be referred to as
21 "alternate bonds". Alternate bonds may be issued without any
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1 referendum or backdoor referendum except as provided in this
2 Section, upon the terms provided in Section 10 of this Act
3 without reference to other provisions of law, but only upon
4 the conditions provided in this Section. Alternate bonds
5 shall not be regarded as or included in any computation of
6 indebtedness for the purpose of any statutory provision or
7 limitation except as expressly provided in this Section.
8 Such conditions are:
9 (a) Alternate bonds shall be issued for a lawful
10 corporate purpose. If issued in lieu of revenue bonds,
11 alternate bonds shall be issued for the purposes for which
12 such revenue bonds shall have been authorized. If issued
13 payable from a revenue source in the manner hereinafter
14 provided, which revenue source is limited in its purposes or
15 applications, then the alternate bonds shall be issued only
16 for such limited purposes or applications. Alternate bonds
17 may be issued payable from either enterprise revenues or
18 revenue sources, or both.
19 (b) Alternate bonds shall be subject to backdoor
20 referendum. The provisions of Section 5 of this Act shall
21 apply to such backdoor referendum, together with the
22 provisions hereof. The authorizing ordinance shall be
23 published in a newspaper of general circulation in the
24 governmental unit. Along with or as part of the authorizing
25 ordinance, there shall be published a notice of (1) the
26 specific number of voters required to sign a petition
27 requesting that the issuance of the alternate bonds be
28 submitted to referendum, (2) the time when such petition must
29 be filed, (3) the date of the prospective referendum, and
30 (4), with respect to authorizing ordinances adopted on or
31 after January 1, 1991, a statement that identifies any
32 revenue source that will be used to pay the principal of and
33 interest on the alternate bonds. The clerk or secretary of
34 the governmental unit shall make a petition form available to
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1 anyone requesting one. If no petition is filed with the
2 clerk or secretary within 30 days of publication of the
3 authorizing ordinance and notice, the alternate bonds shall
4 be authorized to be issued. But if within this 30 days
5 period, a petition is filed with such clerk or secretary
6 signed by electors numbering the greater of (i) 7.5% of the
7 registered voters in the governmental unit or (ii) 200 of
8 those registered voters or 15% of those registered voters,
9 whichever is less, asking that the issuance of such alternate
10 bonds be submitted to referendum, the clerk or secretary
11 shall certify such question for submission at an election
12 held in accordance with the general election law. The
13 question on the ballot shall include a statement of any
14 revenue source that will be used to pay the principal of and
15 interest on the alternate bonds. The alternate bonds shall be
16 authorized to be issued if a majority of the votes cast on
17 the question at such election are in favor thereof provided
18 that notice of the bond referendum, if heretofore or
19 hereafter held, has been or shall be given in accordance with
20 the provisions of Section 12-5 of the Election Code, at least
21 10 and not more than 45 days before the date of the election,
22 notwithstanding the time for publication otherwise imposed by
23 Section 12-5. Backdoor referendum proceedings for bonds and
24 alternate bonds to be issued in lieu of such bonds may be
25 conducted at the same time.
26 (c) To the extent payable from enterprise revenues, such
27 revenues shall have been determined by the governing body to
28 be sufficient to provide for or pay in each year to final
29 maturity of such alternate bonds all of the following: (1)
30 costs of operation and maintenance of the utility or
31 enterprise, but not including depreciation, (2) debt service
32 on all outstanding revenue bonds payable from such enterprise
33 revenues, (3) all amounts required to meet any fund or
34 account requirements with respect to such outstanding revenue
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1 bonds, (4) other contractual or tort liability obligations,
2 if any, payable from such enterprise revenues, and (5) in
3 each year, an amount not less than 1.25 times debt service of
4 all (i) alternate bonds payable from such enterprise revenues
5 previously issued and outstanding and (ii) alternate bonds
6 proposed to be issued. To the extent payable from one or
7 more revenue sources, such sources shall have been determined
8 by the governing body to provide in each year, an amount not
9 less than 1.25 times debt service of all alternate bonds
10 payable from such revenue sources previously issued and
11 outstanding and alternate bonds proposed to be issued. The
12 conditions enumerated in this subsection (c) need not be met
13 for that amount of debt service provided for by the setting
14 aside of proceeds of bonds or other moneys at the time of the
15 delivery of such bonds.
16 (d) The determination of the sufficiency of enterprise
17 revenues or a revenue source, as applicable, shall be
18 supported by reference to the most recent audit of the
19 governmental unit, which shall be for a fiscal year ending
20 not earlier than 18 months previous to the time of issuance
21 of the alternate bonds. If such audit does not adequately
22 show such enterprise revenues or revenue source, as
23 applicable, or if such enterprise revenues or revenue source,
24 as applicable, are shown to be insufficient, then the
25 determination of sufficiency shall be supported by the report
26 of an independent accountant or feasibility analyst, the
27 latter having a national reputation for expertise in such
28 matters, demonstrating the sufficiency of such revenues and
29 explaining, if appropriate, by what means the revenues will
30 be greater than as shown in the audit. Whenever such
31 sufficiency is demonstrated by reference to a schedule of
32 higher rates or charges for enterprise revenues or a higher
33 tax imposition for a revenue source, such higher rates,
34 charges or taxes shall have been properly imposed by an
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1 ordinance adopted prior to the time of delivery of alternate
2 bonds. The reference to and acceptance of an audit or
3 report, as the case may be, and the determination of the
4 governing body as to sufficiency of enterprise revenues or a
5 revenue source shall be conclusive evidence that the
6 conditions of this Section have been met and that the
7 alternate bonds are valid.
8 (e) The enterprise revenues or revenue source, as
9 applicable, shall be in fact pledged to the payment of the
10 alternate bonds; and the governing body shall covenant, to
11 the extent it is empowered to do so, to provide for, collect
12 and apply such enterprise revenues or revenue source, as
13 applicable, to the payment of the alternate bonds and the
14 provision of not less than an additional .25 times debt
15 service. The pledge and establishment of rates or charges
16 for enterprise revenues, or the imposition of taxes in a
17 given rate or amount, as provided in this Section for
18 alternate bonds, shall constitute a continuing obligation of
19 the governmental unit with respect to such establishment or
20 imposition and a continuing appropriation of the amounts
21 received. All covenants relating to alternate bonds and the
22 conditions and obligations imposed by this Section are
23 enforceable by any bondholder of alternate bonds affected,
24 any taxpayer of the governmental unit, and the People of the
25 State of Illinois acting through the Attorney General or any
26 designee, and in the event that any such action results in an
27 order finding that the governmental unit has not properly set
28 rates or charges or imposed taxes to the extent it is
29 empowered to do so or collected and applied enterprise
30 revenues or any revenue source, as applicable, as required by
31 this Act, the plaintiff in any such action shall be awarded
32 reasonable attorney's fees. The intent is that such
33 enterprise revenues or revenue source, as applicable, shall
34 be sufficient and shall be applied to the payment of debt
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1 service on such alternate bonds so that taxes need not be
2 levied, or if levied need not be extended, for such payment.
3 Nothing in this Section shall inhibit or restrict the
4 authority of a governing body to determine the lien priority
5 of any bonds, including alternate bonds, which may be issued
6 with respect to any enterprise revenues or revenue source.
7 In the event that alternate bonds shall have been issued
8 and taxes, other than a designated revenue source, shall have
9 been extended pursuant to the general obligation, full faith
10 and credit promise supporting such alternate bonds, then the
11 amount of such alternate bonds then outstanding shall be
12 included in the computation of indebtedness of the
13 governmental unit for purposes of all statutory provisions or
14 limitations until such time as an audit of the governmental
15 unit shall show that the alternate bonds have been paid from
16 the enterprise revenues or revenue source, as applicable,
17 pledged thereto for a complete fiscal year.
18 Alternate bonds may be issued to refund or advance refund
19 alternate bonds without meeting any of the conditions set
20 forth in this Section, except that the term of the refunding
21 bonds shall not be longer than the term of the refunded bonds
22 and that the debt service payable in any year on the
23 refunding bonds shall not exceed the debt service payable in
24 such year on the refunded bonds.
25 Once issued, alternate bonds shall be and forever remain
26 until paid or defeased the general obligation of the
27 governmental unit, for the payment of which its full faith
28 and credit are pledged, and shall be payable from the levy of
29 taxes as is provided in this Act for general obligation
30 bonds.
31 The changes made by this amendatory Act of 1990 do not
32 affect the validity of bonds authorized before September 1,
33 1990.
34 (Source: P.A. 90-812, eff. 1-26-99.)
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1 (30 ILCS 350/16) (from Ch. 17, par. 6916)
2 Sec. 16. Levy for bonds. A governmental unit may levy a
3 tax for the payment of principal of and interest on general
4 obligation bonds or limited bonds at any time prior to March
5 1 of the calendar year during which the tax will be
6 collected. The county clerk shall accept the filing of the
7 ordinance levying such tax notwithstanding that such time is
8 subsequent to the end of the calendar year next preceding the
9 calendar year during which such tax will be collected. In
10 extending taxes for general obligation bonds, the county
11 clerk shall add to the levy for debt service on such bonds an
12 amount sufficient, in view of all losses and delinquencies in
13 tax collection, to produce tax receipts adequate for the
14 prompt payment of such debt service.
15 (Source: P.A. 88-676, eff. 12-14-94.)
16 (30 ILCS 350/17) (from Ch. 17, par. 6917)
17 Sec. 17. Interest not debt; debt on Leases and
18 installment contracts.
19 (a) Interest not debt; debt on leases and installment
20 contracts. Interest on bonds shall not be included in any
21 computation of indebtedness of a governmental unit for the
22 purpose of any statutory provision or limitation. For bonds
23 consisting of leases and installment or financing contracts,
24 (1) that portion of payments made by a governmental unit
25 under the terms of a bond designated as interest in the bond
26 or the ordinance authorizing such bond shall be treated as
27 interest for purposes of this Section (2) where portions of
28 payments due under the terms of a bond have not been
29 designated as interest in the bond or the ordinance
30 authorizing such bond, and all or a portion of such payments
31 is to be used for the payment of principal of and interest on
32 other bonds of the governmental unit or bonds issued by
33 another unit of local government, such as a public building
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1 commission, the payments equal to interest due on such
2 corresponding bonds shall be treated as interest for purposes
3 of this Section and (3) where portions of payments due under
4 the terms of a bond have not been designated as interest in
5 the bond or ordinance authorizing such bond and no portion of
6 any such payment is to be used for the payment of principal
7 of and interest on other bonds of the governmental unit or
8 another unit of local government, a portion of each payment
9 due under the terms of such bond shall be treated as interest
10 for purposes of this Section; such portion shall be equal in
11 amount to the interest that would have been paid on a
12 notional obligation of the governmental unit (bearing
13 interest at the highest rate permitted by law for bonds of
14 the governmental unit at the time the bond was issued or, if
15 no such limit existed, 12%) on which the payments of
16 principal and interest were due at the same times and in the
17 same amounts as payments are due under the terms of the
18 bonds. The rule set forth in this Section shall be
19 applicable to all interest no matter when earned or accrued
20 or at what interval paid, and whether or not a bond bears
21 interest which compounds at certain intervals. For purposes
22 of bonds sold at amounts less than 95% of their stated value
23 at maturity, interest for purposes of this Section includes
24 the difference between the amount set forth on the face of
25 the bond as the original principal amount and the bond's
26 received for the sale of the bonds and their stated value at
27 maturity.
28 This subsection Section may be made applicable to bonds
29 issued prior to the effective date of this Act by passage of
30 an ordinance to such effect by the governing body of a
31 governmental unit.
32 (b) Purchase or lease of property. The governing body of
33 each governmental unit may purchase or lease either real or
34 personal property through agreements that provide that the
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1 consideration for the purchase or lease may be paid through
2 installments made at stated intervals for a period of no more
3 than 20 years or another period of time authorized by law,
4 whichever is greater. Each governmental unit may issue
5 certificates evidencing the indebtedness incurred under the
6 agreements. The certificate shall be valid whether or not an
7 appropriation with respect thereto is included in any annual
8 or supplemental budget adopted by the governmental unit. The
9 governing body of each governmental unit may sell, convey,
10 and reacquire either real or personal property, upon any
11 terms and conditions and in any manner, as the governing body
12 shall determine, if the governmental unit will lease the
13 property, as authorized by this subsection or any other
14 applicable law.
15 All indebtedness incurred under this subsection, when
16 aggregated with the existing indebtedness of the governmental
17 unit, may not exceed the debt limits provided by applicable
18 law.
19 (Source: P.A. 85-1419.)
20 (30 ILCS 350/17.5 new)
21 Sec. 17.5. Bond authorization by referendum. Whenever
22 applicable law provides that the authorization of or the
23 issuance of bonds is subject to either a front-door or
24 back-door referendum, the approval, once obtained, remains
25 valid (i) for 10 years after the date of the front-door
26 referendum or (ii) for 3 years after the end of the petition
27 period for a back-door referendum.
28 Section 99. Effective date. This Act takes effect upon
29 becoming law.".