2016 Illinois Compiled Statutes
Chapter 30 - FINANCE
30 ILCS 350/ - Local Government Debt Reform Act.
(30 ILCS 350/1) (from Ch. 17, par. 6901)
Sec. 1. Short title. This Act shall be known and may be cited as the Local Government Debt Reform Act.
(Source: P.A. 85-1419.)
(30 ILCS 350/2) (from Ch. 17, par. 6902)
Sec. 2. Findings. The General Assembly finds: (a) There have been many and important changes in the market for and practices with respect to the issuance of bonds of local governmental units in recent years.
(b) Various provisions of the Illinois law are inconsistent and outdated.
(c) Many of these provisions result in additional costs for the citizens of the State of Illinois residing in local governmental units because of the sale and issuance of bonds at higher rates than would otherwise be necessary.
(d) The General Assembly deems it advisable and in the best interests of the residents of Illinois local governmental units to provide supplemental authority regarding the issuance and sale of bonds to accommodate such market practices and the provisions of current federal income tax law.
(Source: P.A. 85-1419.)
(30 ILCS 350/3) (from Ch. 17, par. 6903)
Sec. 3. Definitions. In this Act words or terms shall have the following meanings unless the context or usage clearly indicates that another meaning is intended.
(a) "Alternate bonds" means bonds issued in lieu of revenue bonds or payable from a revenue source as provided in Section 15.
(b) "Applicable law" means any provision of law, including this Act, authorizing governmental units to issue bonds.
(c) "Backdoor referendum" means the submission of a public question to the voters of a governmental unit, initiated by a petition of voters, residents or property owners of such governmental unit, to determine whether an action by the governing body of such governmental unit shall be effective, adopted or rejected.
(d) "Bond" means any instrument evidencing the obligation to pay money authorized or issued by or on behalf of a governmental unit under applicable law, including without limitation, bonds, notes, installment or financing contracts, leases, certificates, tax anticipation warrants or notes, vouchers, and any other evidences of indebtedness.
(e) "Debt service" on bonds means the amount of principal, interest and premium, if any, when due either at stated maturity or upon mandatory redemption.
(f) "Enterprise revenues" means the revenues of a utility or revenue producing enterprise from which revenue bonds may be payable.
(g) "General obligation bonds" means bonds of a governmental unit for the payment of which the governmental unit is empowered to levy ad valorem property taxes upon all taxable property in a governmental unit without limitation as to rate or amount.
(h) "Governing body" means the legislative body, council, board, commission, trustees, or any other body, by whatever name it is known, having charge of the corporate affairs of a governmental unit.
(h-5) "Governmental revenue source" means a revenue source that is either (1) federal or State funds that the governmental unit has received in some amount during each of the 3 fiscal years preceding the issuance of alternate bonds or (2) revenues to be received from another governmental unit under an intergovernmental cooperation agreement.
(i) "Governmental unit" means a county, township, municipality, municipal corporation, unit of local government, school district, special district, public corporation, body corporate and politic, forest preserve district, fire protection district, conservation district, park district, sanitary district, and all other local governmental agencies, including any entity created by intergovernmental agreement among any of the foregoing governmental units, but does not include any office, officer, department, division, bureau, board, commission, university, or similar agency of the State.
(j) "Ordinance" means an ordinance duly adopted by a governing body or, if appropriate under applicable law, a resolution so adopted.
(k) "Revenue bonds" means any bonds of a governmental unit other than general obligation bonds, but "revenue bonds" does include any debt authorized under Section 11-29.3-1 of the Illinois Municipal Code.
(l) "Revenue source" means a source of funds, other than enterprise revenues, received or available to be received by a governmental unit and available for any one or more of its corporate purposes.
(m) "Limited bonds" means bonds, excluding leases, notes, installment or financing contracts, certificates, tax anticipation warrants or notes, vouchers, and any other evidences of indebtedness, issued under Section 15.01 of this Act.
(Source: P.A. 92-879, eff. 1-13-03.)
(30 ILCS 350/4) (from Ch. 17, par. 6904)
Sec. 4. Powers supplemental. The provisions of this Act are intended to be supplemental and in addition to all other powers or authorities granted to any governmental unit, shall be construed liberally and shall not be construed as a limitation of any power or authority otherwise granted.
(Source: P.A. 85-1419.)
(30 ILCS 350/5) (from Ch. 17, par. 6905)
Sec. 5. Backdoor referendum procedure.
(a) Whenever applicable law provides that the authorization or the issuance of bonds, or the becoming effective of an ordinance providing for the authorization or issuance of bonds, may be subject to a backdoor referendum, the provisions of this Section may be used as an alternative to the specific procedures as otherwise set forth by applicable law.
(b) The governing body may adopt an authorizing ordinance describing briefly the authority under which bonds are proposed to be issued, the nature of the project or purpose to be financed, the estimated total costs of the project or purpose, including in such costs all items related to financing the project or purpose, and the maximum amount of bonds authorized to be issued to pay such costs. No further details or specifications are required in such authorizing ordinance. Such authorizing ordinance, along with any other notice as required by applicable law, including any notice as to the right of electors to file a petition and the number of voters required to sign any such petition, shall be published at least once in a newspaper of general circulation in the governmental unit. The governing body may, but is not required to, post the notice electronically on its World Wide Web pages. A petition may be filed after such publication or posting during the period as provided by applicable law; but upon the expiration of any such period without the filing of a petition meeting the requirements of the applicable law, the governing body shall be authorized to issue such bonds as if they had followed all necessary procedures set forth in such applicable law.
(c) If no petition meeting the requirements of applicable law is filed during the petition period, then the governing body may adopt additional ordinances or proceedings supplementing or amending the authorizing ordinance so long as the maximum amount of bonds as set forth in the authorizing ordinance is not exceeded and there is no material change in the project or purpose described in the authorizing ordinance. Such additional ordinances or proceedings shall in all instances become effective immediately without publication or posting or any further act or requirement. The authorizing ordinance, together with such additional ordinance or proceedings, shall constitute complete authority for the issuance of such bonds under applicable law.
(d) If applicable law provides that notice alone shall be given to commence a backdoor referendum, the notice shall be published at least once in a newspaper of general circulation in the governmental unit. The governing body may, but is not required to, post the notice electronically on its World Wide Web pages.
(Source: P.A. 91-868, eff. 6-22-00.)
(30 ILCS 350/5.5)
Sec. 5.5. Notices.
(a) Whenever applicable law requires notice in connection with the issuance of bonds, the notice shall be sufficient if the notice appears above the name or title of the person required to give the notice.
(b) Whenever applicable law requires any notice of a hearing or meeting held in connection with the issuance of bonds to be supplied to the members of the governing body or news media, such notice may be supplied by facsimile transmission (commonly referred to as fax) or electronic transmission (commonly referred to as e-mail).
(Source: P.A. 92-879, eff. 1-13-03.)
(30 ILCS 350/6) (from Ch. 17, par. 6906)
Sec. 6. Costs of project or purpose. Whenever a governmental unit is authorized by applicable law to issue bonds without referendum pursuant to authority granted or mandate imposed to pay for some public purpose or facility, the public corporation may add to the estimate of costs and include in the authorized amount for such bonds and pay from bond proceeds an amount to provide for expenses of issuing such bonds, including underwriter's spread and costs of bond insurance or other credit enhancement, and also an amount to pay capitalized interest and provide a reserve fund as otherwise permitted by this Act.
(Source: P.A. 85-1419.)
(30 ILCS 350/7) (from Ch. 17, par. 6907)
Sec. 7. Reserves. A governing body may provide for a reserve fund solely for the payment of the principal of and interest on bonds. Bond proceeds may be used to provide such reserve fund.
(Source: P.A. 85-1419.)
(30 ILCS 350/8) (from Ch. 17, par. 6908)
Sec. 8. Coverage covenant. A governing body is authorized and may covenant and contract with the holders of revenue bonds to levy, charge and collect moneys pledged as security for the payment of revenue bonds in amounts sufficient to provide for the prompt payment of debt service and to provide an additional amount of money as coverage computed as a percentage of the amount of debt service scheduled to be payable in any given year.
(Source: P.A. 85-1419.)
(30 ILCS 350/9) (from Ch. 17, par. 6909)
Sec. 9. Provisions for interest.
(a) The proceeds of bonds may be used to provide for the payment of interest upon such bonds for a period not to exceed the greater of 2 years or a period ending 6 months after the estimated date of completion of the acquisition and construction of the project or accomplishment of the purpose for which such bonds are issued.
(b) In addition it shall be lawful for the governing body of any governmental unit issuing bonds to appropriate money for the purpose of paying interest on such bonds during the period stated in subsection (a) of this Section. Such appropriation may be made in the ordinance authorizing such bonds and shall be fully effective upon the effective date of such ordinance without any further notice, publication or approval whatsoever.
(c) The governing body of any governmental unit may authorize the transfer of interest earned on any of the moneys of the governmental unit, including moneys set aside to pay debt service, into the fund of the governmental unit that is most in need of the interest. This subsection does not apply to any interest earned that has been earmarked or restricted by the governing body for a designated purpose. This subsection does not apply to any interest earned on any funds for the purpose of municipal retirement under the Illinois Pension Code and tort immunity under the Local Governmental and Governmental Employees Tort Immunity Act. Interest earned on those funds may be used only for the purposes authorized for the respective funds from which the interest earnings were derived.
(Source: P.A. 92-879, eff. 1-13-03.)
(30 ILCS 350/10) (from Ch. 17, par. 6910)
Sec. 10. General provisions. Bonds authorized by applicable law may be issued in one or more series, bear such date or dates, become due at such time or times within 40 years, except as expressly limited by applicable law, provided that notwithstanding any such express limitation bonds issued by Lockport High School, Township High School District 113, South Suburban Community College District No. 510, Elgin Community College District No. 509, or Kishwaukee Community College District No. 523 for the purpose of purchasing, constructing, or improving real property or paying claims against any such district incurred for the purpose of purchasing, constructing, or improving real property may become due within 25 years, bear interest payable at such intervals and at such rate or rates as authorized under applicable law, which rates may be fixed or variable, be in such denominations, be in such form, either coupon, registered or book-entry, carry such conversion, registration, and exchange privileges, be subject to defeasance upon such terms, have such rank or priority, be executed in such manner, be payable in such medium of payment at such place or places within or without the State of Illinois, make provision for a corporate trustee within or without the State with respect to such bonds, prescribe the rights, powers and duties thereof to be exercised for the benefit of the governmental unit and the protection of the bondholders, provide for the holding in trust, investment and use of moneys, funds and accounts held under an ordinance, provide for assignment of and direct payment of the moneys to pay such bonds or to be deposited into such funds or accounts directly to such trustee, be subject to such terms of redemption with or without premium, and be sold in such manner at private or public sale and at such price, all as the governing body shall determine. Whenever such bonds are sold at price less than par, they shall be sold at such price and bear interest at such rate or rates such that either the true interest cost (yield) or the net interest rate, as may be selected by the governing body, received upon the sale of such bonds does not exceed the maximum rate otherwise authorized by applicable law. Except for an ordinance required to be published by applicable law in connection with a backdoor referendum, any bond ordinance adopted by a governing body under applicable law shall, in all instances, become effective immediately without publication or posting or any further act or requirement.
(Source: P.A. 97-615, eff. 8-26-11; 98-36, eff. 6-28-13.)
(30 ILCS 350/11) (from Ch. 17, par. 6911)
Sec. 11. Refundings and redemption premiums. Bonds may be refunded or advance refunded upon such terms as the governing body may set in accordance with this Act, for such term of years, not in excess of the maximum term of years permitted by applicable law for the bonds to be refunded, and in such principal amount, all as may be deemed necessary by the governing body. Revenue bonds may be issued to refund general obligation bonds or alternate bonds issued under this Act. General obligation bonds shall not be issued to refund revenue bonds or alternate bonds except as expressly permitted by applicable law. Any redemption premium payable upon the redemption of bonds may be payable from the proceeds of refunding bonds which may be issued for the purpose of refunding such bonds, from any other lawfully available source or from both proceeds and such other sources.
(Source: P.A. 90-306, eff. 8-1-97.)
(30 ILCS 350/12) (from Ch. 17, par. 6912)
Sec. 12. Invest in tax-exempts; joint investments. In addition to the authority otherwise available to invest funds, a governing body may authorize and upon such authorization the treasurer of any governmental unit may (i) invest proceeds of bonds or money on deposit in any debt service or reserve fund or account relating to bonds in obligations the interest upon which is tax-exempt under the provisions of Section 103 of the Internal Revenue Code of 1986, as now or hereafter amended, or any successor code or provision, subject to such tax-exempt obligations being rated at the time of purchase within the 4 highest general classifications established by a rating service of nationally recognized expertise in rating bonds of states and the political subdivisions thereof and (ii) join with the treasurers of other governmental units for the purpose of jointly investing the funds of which the treasurer has custody.
(Source: P.A. 96-964, eff. 7-2-10.)
(30 ILCS 350/13) (from Ch. 17, par. 6913)
Sec. 13. Certain pledges. A governmental unit may pledge, as security for the payment of its bonds, (1) revenues derived from the operation of any utility system or revenue producing enterprise, (2) moneys deposited or to be deposited into any special fund of the governmental unit, (3) grants or other revenues or taxes expected to be received by the governmental unit from the State or federal government, including taxes imposed by the governmental unit pursuant to grant of authority by the State, such as sales or use taxes or utility taxes, (4) special assessments to be collected with respect to a local improvement financed with the proceeds of bonds, or (5) payments to be made by another governmental unit pursuant to a service, user or other similar agreement with such governmental unit.
Any such pledge made by a governmental unit shall be valid and binding from the time such pledge is made. The revenues, moneys and other funds so pledged and thereafter received by the governmental unit shall immediately be subject to the lien of such pledge without any physical delivery thereof or further act; and, subject only to the provisions of prior agreements, the lien of such pledge shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the governmental unit irrespective of whether such parties have notice thereof. Pursuant to any such pledge, a governmental unit may bind itself to impose rates, charges or taxes to the fullest extent permitted by applicable law. No ordinance, resolution, trust agreement or other instrument by which such pledge is created need be filed or recorded except in the records of the governmental unit.
The State Treasurer, the State Comptroller, the Department of Revenue, the Department of Transportation, the State Superintendent of Education, or any Regional Superintendent of Schools shall deposit or cause to be deposited any amount of grants or other revenues or taxes expected to be received by a qualified governmental unit from that official or entity that have been pledged to the payment of bonds of the qualified governmental unit, in accordance with the authorization of the qualified governmental unit, directly into a designated escrow account established by the qualified governmental unit at a trust company or bank having trust powers. The ordinance authorizing that disposition shall, within 10 days after adoption by the governing body of the qualified governmental unit, be filed with the official or entity having custody of the pledged grants or other revenues or taxes.
For the purposes of this Section, "qualified governmental unit" means a governmental unit (i) that has issued not less than $6,000,000 principal amount of bonds, including the principal amount of bonds to be secured by the deposit into the designated escrow account, during the 24 months preceding the adoption of the ordinance authorizing the deposit, (ii) whose bonds secured by the deposit into the designated escrow account are rated without regard to any credit enhancement within the 3 highest general rating classifications established by a rating service of nationally recognized expertise in rating bonds of states and political subdivisions of states, (iii) that has received the Certificate of Achievement for Excellence in Financial Reporting from the Government Finance Officers Association or the equivalent award from the Association of School Business Officials International during the 24 months preceding the adoption of the ordinance authorizing the deposit, or (iv) that represents a population in excess of 300,000.
(Source: P.A. 91-868, eff. 6-22-00; 92-78, eff. 7-12-01.)
(30 ILCS 350/14) (from Ch. 17, par. 6914)
Sec. 14. Certain warrant provisions. Whenever applicable law permits a governmental unit to issue warrants in anticipation of taxes to be levied or other funds to be received, the governing body of such governmental unit may cause such warrants to have a specified due date reasonably calculated to be after the receipt of the taxes or other revenues anticipated, may designate and so cause such warrants to be general obligation bonds within the meaning of this Act, may provide for refunding warrants or general obligation bonds to refund such warrants should the taxes or other revenues to pay the same be delayed or insufficient to pay the same, and may provide for the separate levy of taxes, without limitation as to rate or amount, on all ad valorem taxable property within the governmental unit, to pay such warrants or refunding warrants or bonds. Nothing herein shall authorize the issuance of warrants in excess of the amount otherwise permitted by applicable law. The county collector shall deposit any amount of tax proceeds pledged to the payment of warrants of any governmental unit, in accordance with the authorization of such governmental unit, directly into a designated escrow account established by the governmental unit. The ordinance authorizing such disposition shall be filed with the county collector or collectors of the county or counties within which taxable property of the governmental unit is located. Warrants initially issued pursuant to this Act shall not be regarded as or included in any computation of indebtedness for the purpose of any statutory provision or limitation. General obligation bonds to refund warrants issued hereunder or refunding warrants may be issued without regard to existing indebtedness but upon being issued shall be included and regarded as indebtedness.
(Source: P.A. 85-1419.)
(30 ILCS 350/15) (from Ch. 17, par. 6915)
Sec. 15. Double-barrelled bonds. Whenever revenue bonds have been authorized to be issued pursuant to applicable law or whenever there exists for a governmental unit a revenue source, the procedures set forth in this Section may be used by a governing body. General obligation bonds may be issued in lieu of such revenue bonds as authorized, and general obligation bonds may be issued payable from any revenue source. Such general obligation bonds may be referred to as "alternate bonds". Alternate bonds may be issued without any referendum or backdoor referendum except as provided in this Section, upon the terms provided in Section 10 of this Act without reference to other provisions of law, but only upon the conditions provided in this Section. Alternate bonds shall not be regarded as or included in any computation of indebtedness for the purpose of any statutory provision or limitation except as expressly provided in this Section.
Such conditions are:
(a) Alternate bonds shall be issued for a lawful corporate purpose. If issued in lieu of revenue bonds, alternate bonds shall be issued for the purposes for which such revenue bonds shall have been authorized. If issued payable from a revenue source in the manner hereinafter provided, which revenue source is limited in its purposes or applications, then the alternate bonds shall be issued only for such limited purposes or applications. Alternate bonds may be issued payable from either enterprise revenues or revenue sources, or both.
(b) Alternate bonds shall be subject to backdoor referendum. The provisions of Section 5 of this Act shall apply to such backdoor referendum, together with the provisions hereof. The authorizing ordinance shall be published in a newspaper of general circulation in the governmental unit. Along with or as part of the authorizing ordinance, there shall be published a notice of (1) the specific number of voters required to sign a petition requesting that the issuance of the alternate bonds be submitted to referendum, (2) the time when such petition must be filed, (3) the date of the prospective referendum, and (4), with respect to authorizing ordinances adopted on or after January 1, 1991, a statement that identifies any revenue source that will be used to pay debt service on the alternate bonds. The clerk or secretary of the governmental unit shall make a petition form available to anyone requesting one.
Except as provided in the following paragraph, if no petition is filed with the clerk or secretary within 30 days of publication of the authorizing ordinance and notice, the alternate bonds shall be authorized to be issued. But if within this 30 days period, a petition is filed with such clerk or secretary signed by electors numbering the greater of (i) 7.5% of the registered voters in the governmental unit or (ii) 200 of those registered voters or 15% of those registered voters, whichever is less, asking that the issuance of such alternate bonds be submitted to referendum, the clerk or secretary shall certify such question for submission at an election held in accordance with the general election law.
Notwithstanding the previous paragraph, in governmental units with fewer than 500,000 inhabitants that propose to issue alternate bonds payable solely from enterprise revenues as defined under Section 3 of this Act, except for such alternate bonds that finance or refinance projects concerning public utilities, public streets and roads or public safety facilities, and related infrastructure and equipment, if no petition is filed with the clerk or secretary within 45 days of publication of the authorizing ordinance and notice, the alternate bonds shall be authorized to be issued. But if, within this 45-day period, a petition is filed with such clerk or secretary signed by the necessary number of electors, asking that the issuance of such alternate bonds be submitted to referendum, the clerk or secretary shall certify such question for submission at an election held in accordance with the general election law. For purposes of this paragraph, the necessary number of electors for a governmental unit with more than 4,000 registered voters is the lesser of (i) 5% of the registered voters or (ii) 5,000 registered voters; and the necessary number of electors for a governmental unit with 4,000 or fewer registered voters is the lesser of (i) 15% of the registered voters or (ii) 200 registered voters.
The question on the ballot shall include a statement of any revenue source that will be used to pay debt service on the alternate bonds. The alternate bonds shall be authorized to be issued if a majority of the votes cast on the question at such election are in favor thereof provided that notice of the bond referendum, if held before July 1, 1999, has been given in accordance with the provisions of Section 12-5 of the Election Code in effect at the time of the bond referendum, at least 10 and not more than 45 days before the date of the election, notwithstanding the time for publication otherwise imposed by Section 12-5. Notices required in connection with the submission of public questions on or after July 1, 1999 shall be as set forth in Section 12-5 of the Election Code. Backdoor referendum proceedings for bonds and alternate bonds to be issued in lieu of such bonds may be conducted at the same time.
(c) To the extent payable from enterprise revenues, such revenues shall have been determined by the governing body to be sufficient to provide for or pay in each year to final maturity of such alternate bonds all of the following: (1) costs of operation and maintenance of the utility or enterprise, but not including depreciation, (2) debt service on all outstanding revenue bonds payable from such enterprise revenues, (3) all amounts required to meet any fund or account requirements with respect to such outstanding revenue bonds, (4) other contractual or tort liability obligations, if any, payable from such enterprise revenues, and (5) in each year, an amount not less than 1.25 times debt service of all (i) alternate bonds payable from such enterprise revenues previously issued and outstanding and (ii) alternate bonds proposed to be issued. To the extent payable from one or more revenue sources, such sources shall have been determined by the governing body to provide in each year, an amount not less than 1.25 times debt service of all alternate bonds payable from such revenue sources previously issued and outstanding and alternate bonds proposed to be issued. The 1.25 figure in the preceding sentence shall be reduced to 1.10 if the revenue source is a governmental revenue source. The conditions enumerated in this subsection (c) need not be met for that amount of debt service provided for by the setting aside of proceeds of bonds or other moneys at the time of the delivery of such bonds.
(c-1) In the case of alternate bonds issued as variable rate bonds (including refunding bonds), debt service shall be projected based on the rate for the most recent date shown in the 20 G.O. Bond Index of average municipal bond yields as published in the most recent edition of The Bond Buyer published in New York, New York (or any successor publication or index, or if such publication or index is no longer published, then any index of long-term municipal tax-exempt bond yields selected by the governmental unit), as of the date of determination referred to in subsection (c) of this Section. Any interest or fees that may be payable to the provider of a letter of credit, line of credit, surety bond, bond insurance, or other credit enhancement relating to such alternate bonds and any fees that may be payable to any remarketing agent need not be taken into account for purposes of such projection. If the governmental unit enters into an agreement in connection with such alternate bonds at the time of issuance thereof pursuant to which the governmental unit agrees for a specified period of time to pay an amount calculated at an agreed-upon rate or index based on a notional amount and the other party agrees to pay the governmental unit an amount calculated at an agreed-upon rate or index based on such notional amount, interest shall be projected for such specified period of time on the basis of the agreed-upon rate payable by the governmental unit.
(d) The determination of the sufficiency of enterprise revenues or a revenue source, as applicable, shall be supported by reference to the most recent audit of the governmental unit, which shall be for a fiscal year ending not earlier than 18 months previous to the time of issuance of the alternate bonds. If such audit does not adequately show such enterprise revenues or revenue source, as applicable, or if such enterprise revenues or revenue source, as applicable, are shown to be insufficient, then the determination of sufficiency shall be supported by the report of an independent accountant or feasibility analyst, the latter having a national reputation for expertise in such matters, who is not otherwise involved in the project being financed or refinanced with the proceeds of the alternate bonds, demonstrating the sufficiency of such revenues and explaining, if appropriate, by what means the revenues will be greater than as shown in the audit. Whenever such sufficiency is demonstrated by reference to a schedule of higher rates or charges for enterprise revenues or a higher tax imposition for a revenue source, such higher rates, charges or taxes shall have been properly imposed by an ordinance adopted prior to the time of delivery of alternate bonds. The reference to and acceptance of an audit or report, as the case may be, and the determination of the governing body as to sufficiency of enterprise revenues or a revenue source shall be conclusive evidence that the conditions of this Section have been met and that the alternate bonds are valid.
(e) The enterprise revenues or revenue source, as applicable, shall be in fact pledged to the payment of the alternate bonds; and the governing body shall covenant, to the extent it is empowered to do so, to provide for, collect and apply such enterprise revenues or revenue source, as applicable, to the payment of the alternate bonds and the provision of not less than an additional .25 (or .10 for governmental revenue sources) times debt service. The pledge and establishment of rates or charges for enterprise revenues, or the imposition of taxes in a given rate or amount, as provided in this Section for alternate bonds, shall constitute a continuing obligation of the governmental unit with respect to such establishment or imposition and a continuing appropriation of the amounts received. All covenants relating to alternate bonds and the conditions and obligations imposed by this Section are enforceable by any bondholder of alternate bonds affected, any taxpayer of the governmental unit, and the People of the State of Illinois acting through the Attorney General or any designee, and in the event that any such action results in an order finding that the governmental unit has not properly set rates or charges or imposed taxes to the extent it is empowered to do so or collected and applied enterprise revenues or any revenue source, as applicable, as required by this Act, the plaintiff in any such action shall be awarded reasonable attorney's fees. The intent is that such enterprise revenues or revenue source, as applicable, shall be sufficient and shall be applied to the payment of debt service on such alternate bonds so that taxes need not be levied, or if levied need not be extended, for such payment. Nothing in this Section shall inhibit or restrict the authority of a governing body to determine the lien priority of any bonds, including alternate bonds, which may be issued with respect to any enterprise revenues or revenue source.
In the event that alternate bonds shall have been issued and taxes, other than a designated revenue source, shall have been extended pursuant to the general obligation, full faith and credit promise supporting such alternate bonds, then the amount of such alternate bonds then outstanding shall be included in the computation of indebtedness of the governmental unit for purposes of all statutory provisions or limitations until such time as an audit of the governmental unit shall show that the alternate bonds have been paid from the enterprise revenues or revenue source, as applicable, pledged thereto for a complete fiscal year.
Alternate bonds may be issued to refund or advance refund alternate bonds without meeting any of the conditions set forth in this Section, except that the term of the refunding bonds shall not be longer than the term of the refunded bonds and that the debt service payable in any year on the refunding bonds shall not exceed the debt service payable in such year on the refunded bonds.
Once issued, alternate bonds shall be and forever remain until paid or defeased the general obligation of the governmental unit, for the payment of which its full faith and credit are pledged, and shall be payable from the levy of taxes as is provided in this Act for general obligation bonds.
The changes made by this amendatory Act of 1990 do not affect the validity of bonds authorized before September 1, 1990.
(Source: P.A. 97-542, eff. 8-23-11; 98-203, eff. 1-1-14.)
(30 ILCS 350/15.01)
Sec. 15.01. Limited bonds. A governmental unit is authorized to issue limited bonds payable from the debt service extension base, as defined in the Property Tax Extension Limitation Law, as provided in this amendatory Act of 1995. Bonds authorized by Public Act 88-503 and issued under Section 20a of the Chicago Park District Act for aquarium or museum projects shall not be issued as limited bonds. A governmental unit issuing limited bonds authorized by this Section shall provide in the bond ordinance that the bonds are issued as limited bonds and are also issued pursuant to applicable law, other than this amendatory Act of 1995, enabling the governmental unit to issue bonds. This amendatory Act of 1995 shall not change the rate, amount, purposes, limitations, source of funds for payment of principal or interest, or method of payment or defeasance of the bonds that a governmental unit may issue under any applicable law; provided, that limited bonds that are otherwise to be issued as general obligation bonds may be payable solely from the debt service extension base. This amendatory Act of 1995 provides no additional authority to any governmental unit to issue bonds that the governmental unit is not otherwise authorized to issue by a law other than this amendatory Act of 1995.
(Source: P.A. 89-385, eff. 8-18-95; 89-449, eff. 6-1-96.)
(30 ILCS 350/16) (from Ch. 17, par. 6916)
Sec. 16. Levy for bonds. A governmental unit may levy a tax for the payment of principal of and interest on general obligation bonds or limited bonds at any time prior to March 1 of the calendar year during which the tax will be collected. The county clerk shall accept the filing of the ordinance levying such tax notwithstanding that such time is subsequent to the end of the calendar year next preceding the calendar year during which such tax will be collected. In extending taxes for general obligation bonds, the county clerk shall add to the levy for debt service on such bonds an amount sufficient, in view of all losses and delinquencies in tax collection, to produce tax receipts adequate for the prompt payment of such debt service.
(Source: P.A. 91-493, eff. 8-13-99.)
(30 ILCS 350/16.5)
Sec. 16.5. Proposition for bonds. For all elections held after July 1, 2000, the form of a proposition to authorize the issuance of bonds pursuant to either a referendum or backdoor referendum may be as set forth in this Section as an alternative to the form of proposition as otherwise set forth by applicable law. The proposition authorized by this Section shall be in substantially the following form:
Shall (name of governmental unit) (state purpose for
the bond issue) and issue its bonds to the amount of $ (state amount) for the purpose of paying the costs thereof?
If a school district expects to receive a school construction grant from the State of Illinois pursuant to the School Construction Law for a school construction project to be financed in part with proceeds of a bond authorized by referendum, then the form of proposition may at the option of the school district additionally contain substantially the following language:
(Name of school district) expects to receive a school
construction grant from the State of Illinois in the amount of $ (state amount) pursuant to the School Construction Law for the school construction project to be financed in part with proceeds of the bonds, based on (i) a grant entitlement from the State Board of Education and (ii) current recognized project costs determined by the Capital Development Board.
(Source: P.A. 91-868, eff. 6-22-00; 92-879, eff. 1-13-03.)
(30 ILCS 350/17) (from Ch. 17, par. 6917)
Sec. 17. Leases and installment contracts.
(a) Interest not debt; debt on leases and installment contracts. Interest on bonds shall not be included in any computation of indebtedness of a governmental unit for the purpose of any statutory provision or limitation. For bonds consisting of leases and installment or financing contracts, (1) that portion of payments made by a governmental unit under the terms of a bond designated as interest in the bond or the ordinance authorizing such bond shall be treated as interest for purposes of this Section (2) where portions of payments due under the terms of a bond have not been designated as interest in the bond or the ordinance authorizing such bond, and all or a portion of such payments is to be used for the payment of principal of and interest on other bonds of the governmental unit or bonds issued by another unit of local government, such as a public building commission, the payments equal to interest due on such corresponding bonds shall be treated as interest for purposes of this Section and (3) where portions of payments due under the terms of a bond have not been designated as interest in the bond or ordinance authorizing such bond and no portion of any such payment is to be used for the payment of principal of and interest on other bonds of the governmental unit or another unit of local government, a portion of each payment due under the terms of such bond shall be treated as interest for purposes of this Section; such portion shall be equal in amount to the interest that would have been paid on a notional obligation of the governmental unit (bearing interest at the highest rate permitted by law for bonds of the governmental unit at the time the bond was issued or, if no such limit existed, 12%) on which the payments of principal and interest were due at the same times and in the same amounts as payments are due under the terms of the bonds. The rule set forth in this Section shall be applicable to all interest no matter when earned or accrued or at what interval paid, and whether or not a bond bears interest which compounds at certain intervals. For purposes of bonds sold at amounts less than 95% of their stated value at maturity, interest for purposes of this Section includes the difference between the amount set forth on the face of the bond as the original principal amount and the bond's stated value at maturity.
This subsection may be made applicable to bonds issued prior to the effective date of this Act by passage of an ordinance to such effect by the governing body of a governmental unit.
(b) Purchase or lease of property. The governing body of each governmental unit may purchase or lease either real or personal property, including investments, investment agreements, or investment services, through agreements that provide that the consideration for the purchase or lease may be paid through installments made at stated intervals for a period of no more than 20 years or another period of time authorized by law, whichever is greater; provided, however, that investments, investment agreements, or investment services purchased in connection with a bond issue may be paid through installments made at stated intervals for a period of time not in excess of the maximum term of such bond issue. Each governmental unit may issue certificates evidencing the indebtedness incurred under the lease or agreement. The governing body may provide for the treasurer, comptroller, finance officer, or other officer of the governing body charged with financial administration to act as counter-party to any such lease or agreement, as nominee lessor or seller. When the lease or agreement is executed by the officer of the governmental unit authorized by the governing body to bind the governmental unit thereon by the execution thereof and is filed with and executed by the nominee lessor or seller, the lease or agreement shall be sufficiently executed so as to permit the governmental unit to issue certificates evidencing the indebtedness incurred under the lease or agreement. The certificates shall be valid whether or not an appropriation with respect thereto is included in any annual or supplemental budget adopted by the governmental unit. From time to time, as the governing body executes contracts for the purpose of acquiring and constructing the services or real or personal property that is a part of the subject of the lease or agreement, including financial, legal, architectural, and engineering services related to the lease or agreement, the governing body shall order the contracts filed with its nominee officer, and that officer shall identify the contracts to the lease or agreement; that identification shall permit the payment of the contract from the proceeds of the certificates; and the nominee officer shall duly apply or cause to be applied proceeds of the certificates to the payment of the contracts. The governing body of each governmental unit may sell, lease, convey, and reacquire either real or personal property, or any interest in real or personal property, upon any terms and conditions and in any manner, as the governing body shall determine, if the governmental unit will lease, acquire by purchase agreement, or otherwise reacquire the property, as authorized by this subsection or any other applicable law.
All indebtedness incurred under this subsection, when aggregated with the existing indebtedness of the governmental unit, may not exceed the debt limits provided by applicable law.
(Source: P.A. 91-493, eff. 8-13-99; 91-868, eff. 6-22-00; 92-879, eff. 1-13-03.)
(30 ILCS 350/17.5)
Sec. 17.5. Bond authorization by referendum.
(a) Whenever applicable law provides that the authorization of or the issuance of bonds is subject to either a referendum or backdoor referendum, the approval, once obtained, remains (i) for 5 years after the date of the referendum or (ii) for 3 years after the end of the petition period for a backdoor referendum. However, whenever the applicable law provides that the authorization of or the issuance of bonds under the Water Pollution Control Loan Program or the Public Water Supply Loan Program, under Title IV-A of the Environmental Protection Act, is subject to either a referendum or backdoor referendum, the approval, once obtained, remains (i) for 7 years after the date of the referendum or (ii) for 5 years after the end of the petition period for a backdoor referendum. In the case of bonds authorized to be issued under the Downstate Forest Preserve District Act and approved by Lake County voters in a November 2008 referendum, the approval, once obtained, remains for 10 years after the date of the referendum. In the case of bonds authorized to be issued under the Counties Code and approved by Jackson County voters in a 1994 referendum, of which less than $200,000 of the original bonds have been issued, and for which the purpose of the bonds is flooding prevention, the approval, once obtained, remains for 25 years after the date of the referendum.
(b) With respect to any bond approval under subsection (a), if, for any reason, the bonds are not issued because of a court action, then the time limits set forth under subsection (a) for the approval for the bonds is tolled during the time that the court action is pending. This subsection (b) applies to any bond issuance approved by referendum held on or after January 1, 2003 or by a backdoor referendum held on or after January 1, 2005.
(Source: P.A. 97-364, eff. 8-15-11; 98-655, eff. 6-18-14.)
(30 ILCS 350/18) (from Ch. 17, par. 6918)
Sec. 18. Recital. Bonds which are issued in part pursuant to this Act may contain a recital to that effect and any such recital shall be conclusive as against the governmental unit and the governing body thereof and any other person as to the validity of the bonds and as to their compliance with the provisions of this Act.
(Source: P.A. 85-1419.)
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