Bill Text: IL HB0983 | 2013-2014 | 98th General Assembly | Amended
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Amends the Local Government Debt Reform Act. Provides that determinations of sufficiency of enterprise revenues or revenue sources shall be conducted by the chief procurement officer for procurements of construction and construction-related services under the jurisdiction of the Capital Development Board. Provides that enterprise revenues shall be sufficient to pay 150% (instead of 100%) of the debt service on all outstanding revenue bonds payable from those enterprise revenues. Provides that a petition to initiate a backdoor referendum concerning the issuance of alternate bonds may be filed within 90 (instead of 30) days of publication of the authorizing ordinance and notice. Provides that it must be signed by 5% of the registered voters in the governmental unit or 500 of those registered voters, whichever is less. Provides that, if alternate bonds are payable from a combination of enterprise revenues and property taxes, and if, in any fiscal year of the governmental unit, the total amount of enterprise revenues collected exceeds the debt service payable on those bonds, then, within 90 days after the last day of the fiscal year, the surplus revenues shall be refunded to property owners within the governmental unit according to each property owner's pro rata share of property taxes paid in that fiscal year. Effective immediately.
Spectrum: Moderate Partisan Bill (Republican 7-1)
Status: (Passed) 2013-08-09 - Public Act . . . . . . . . . 98-0203 [HB0983 Detail]
Download: Illinois-2013-HB0983-Amended.html
Bill Title: Amends the Local Government Debt Reform Act. Provides that determinations of sufficiency of enterprise revenues or revenue sources shall be conducted by the chief procurement officer for procurements of construction and construction-related services under the jurisdiction of the Capital Development Board. Provides that enterprise revenues shall be sufficient to pay 150% (instead of 100%) of the debt service on all outstanding revenue bonds payable from those enterprise revenues. Provides that a petition to initiate a backdoor referendum concerning the issuance of alternate bonds may be filed within 90 (instead of 30) days of publication of the authorizing ordinance and notice. Provides that it must be signed by 5% of the registered voters in the governmental unit or 500 of those registered voters, whichever is less. Provides that, if alternate bonds are payable from a combination of enterprise revenues and property taxes, and if, in any fiscal year of the governmental unit, the total amount of enterprise revenues collected exceeds the debt service payable on those bonds, then, within 90 days after the last day of the fiscal year, the surplus revenues shall be refunded to property owners within the governmental unit according to each property owner's pro rata share of property taxes paid in that fiscal year. Effective immediately.
Spectrum: Moderate Partisan Bill (Republican 7-1)
Status: (Passed) 2013-08-09 - Public Act . . . . . . . . . 98-0203 [HB0983 Detail]
Download: Illinois-2013-HB0983-Amended.html
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1 | AMENDMENT TO HOUSE BILL 983
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2 | AMENDMENT NO. ______. Amend House Bill 983 by replacing | ||||||
3 | everything after the enacting clause with the following:
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4 | "Section 5. The Local Government Debt Reform Act is amended | ||||||
5 | by changing Section 15 as follows:
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6 | (30 ILCS 350/15) (from Ch. 17, par. 6915)
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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
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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 |
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1 | the terms provided in Section 10 of this Act
without reference | ||||||
2 | to other provisions of law, but only upon the conditions
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3 | provided in this Section. Alternate bonds shall not be regarded | ||||||
4 | as or
included in any computation of indebtedness for the | ||||||
5 | purpose of any
statutory provision or limitation except as | ||||||
6 | expressly provided in this Section.
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7 | Such conditions are:
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8 | (a) Alternate bonds shall be issued for a lawful
corporate | ||||||
9 | purpose. If issued in lieu of revenue bonds, alternate bonds
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10 | shall be issued for the purposes for which such revenue bonds | ||||||
11 | shall have
been authorized. If issued payable from a revenue | ||||||
12 | source in the manner
hereinafter provided, which revenue source | ||||||
13 | is limited in its purposes or
applications, then the alternate | ||||||
14 | bonds shall be issued only for such
limited purposes or | ||||||
15 | applications. Alternate bonds may be issued payable
from either | ||||||
16 | enterprise revenues or revenue sources, or both.
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17 | (b) Alternate bonds shall be subject to backdoor | ||||||
18 | referendum. The
provisions of Section 5 of this Act shall apply | ||||||
19 | to such backdoor
referendum, together with the provisions | ||||||
20 | hereof. The authorizing ordinance
shall be published in a | ||||||
21 | newspaper of general circulation in the
governmental unit. | ||||||
22 | Along with or as part of the authorizing ordinance,
there shall | ||||||
23 | be published a notice of (1) the specific number of voters
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24 | required to sign a petition requesting that the issuance of the | ||||||
25 | alternate
bonds be submitted to referendum, (2) the time when | ||||||
26 | such petition must
be filed, (3) the date of the prospective |
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1 | referendum, and
(4), with respect to authorizing ordinances | ||||||
2 | adopted on or after January 1,
1991, a statement that | ||||||
3 | identifies any revenue source that will be used to
pay debt | ||||||
4 | service on the alternate bonds.
The clerk or
secretary of the | ||||||
5 | governmental unit shall make a petition form available to
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6 | anyone requesting one. If no petition is filed with the clerk | ||||||
7 | or secretary
within 45 30 days of publication of the | ||||||
8 | authorizing ordinance and notice, the
alternate bonds shall be | ||||||
9 | authorized to be issued. But if within this 45-day 30
days | ||||||
10 | period, a petition is filed with such clerk or secretary signed | ||||||
11 | by
the necessary number of electors numbering the greater of | ||||||
12 | (i) 7.5% of the registered
voters in the governmental unit or | ||||||
13 | (ii) 200 of those registered voters or
15% of those registered | ||||||
14 | voters, whichever is less ,
asking that the issuance of such | ||||||
15 | alternate bonds be submitted to
referendum, the clerk or | ||||||
16 | secretary shall certify such question for
submission at an | ||||||
17 | election held in accordance with the general election law.
The | ||||||
18 | necessary number of electors for a governmental unit with more | ||||||
19 | than 4,000 registered voters is the lesser of (i) 5% of the | ||||||
20 | registered voters or (ii) 5,000 registered voters. The | ||||||
21 | necessary number of electors for a governmental unit with 4,000 | ||||||
22 | or fewer registered voters is the lesser of (i) 15% of the | ||||||
23 | registered voters or (ii) 200 registered voters. The question | ||||||
24 | on the ballot shall include a statement of any
revenue source | ||||||
25 | that will be used to pay debt service on
the alternate bonds. | ||||||
26 | The alternate bonds shall be authorized to be issued
if a |
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1 | majority of the votes cast on the question at such election are | ||||||
2 | in
favor thereof
provided that notice of the bond referendum, | ||||||
3 | if held before July 1, 1999,
has been given in accordance with | ||||||
4 | the provisions of Section
12-5
of the Election Code
in effect | ||||||
5 | at the time of the bond referendum, at least 10 and not more | ||||||
6 | than
45 days before the date of
the election, notwithstanding | ||||||
7 | the time for publication otherwise imposed by
Section 12-5.
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8 | Notices required in connection with the submission of public | ||||||
9 | questions
on or after July 1, 1999 shall be as set forth in | ||||||
10 | Section 12-5 of the Election
Code.
Backdoor referendum | ||||||
11 | proceedings for bonds and alternate
bonds to be issued in lieu | ||||||
12 | of such bonds may be conducted at the same time.
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13 | (c) To the extent payable from enterprise revenues, such | ||||||
14 | revenues shall
have been determined by the governing body to be | ||||||
15 | sufficient to provide for
or pay in each year to final maturity | ||||||
16 | of such alternate bonds all of the
following: (1) costs of | ||||||
17 | operation and maintenance of the utility or
enterprise, but not | ||||||
18 | including depreciation, (2) debt service on all
outstanding | ||||||
19 | revenue bonds payable from such enterprise revenues, (3) all
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20 | amounts required to meet any fund or account requirements with | ||||||
21 | respect to
such outstanding revenue bonds, (4) other | ||||||
22 | contractual or tort liability
obligations, if any, payable from | ||||||
23 | such enterprise revenues, and (5) in each
year, an amount not | ||||||
24 | less than 1.25 times debt service of all (i) alternate
bonds | ||||||
25 | payable from such enterprise revenues previously issued and
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26 | outstanding and (ii) alternate bonds proposed to be issued.
To |
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1 | the extent
payable from one or more revenue sources, such | ||||||
2 | sources shall have been
determined by the governing body to | ||||||
3 | provide in each year, an amount not
less than 1.25 times debt | ||||||
4 | service of all alternate bonds payable from such
revenue | ||||||
5 | sources previously issued and outstanding and alternate bonds
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6 | proposed to be issued.
The 1.25 figure in the preceding | ||||||
7 | sentence shall be reduced to 1.10 if the
revenue source is a | ||||||
8 | governmental revenue source.
The conditions enumerated in this | ||||||
9 | subsection (c)
need not be met for that amount of debt service | ||||||
10 | provided for by the setting
aside of proceeds of bonds or other | ||||||
11 | moneys at the time of the delivery of
such bonds.
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12 | (c-1) In the case of alternate bonds issued as variable | ||||||
13 | rate bonds
(including
refunding bonds), debt service shall be | ||||||
14 | projected based on the rate for the
most recent
date shown in | ||||||
15 | the 20 G.O. Bond Index of average municipal bond yields as
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16 | published in
the most recent edition of The Bond Buyer | ||||||
17 | published in New York, New York (or
any
successor publication | ||||||
18 | or index, or if such publication or index is no longer
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19 | published,
then any index of long-term municipal tax-exempt | ||||||
20 | bond yields selected by the
governmental unit), as of the date | ||||||
21 | of determination referred to in subsection (c) of this
Section. | ||||||
22 | Any interest or fees that may be payable to the provider of a | ||||||
23 | letter of credit, line
of credit, surety bond, bond insurance, | ||||||
24 | or other credit enhancement relating to such
alternate bonds | ||||||
25 | and any fees that may be payable to any remarketing agent need | ||||||
26 | not be
taken into account for purposes of such projection. If |
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1 | the governmental unit enters into
an agreement in connection | ||||||
2 | with such alternate bonds at the time of issuance
thereof
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3 | pursuant to which the governmental unit agrees for a specified | ||||||
4 | period of time
to pay an
amount calculated at an agreed-upon | ||||||
5 | rate or index based on a notional amount
and the other party | ||||||
6 | agrees to pay the governmental unit an amount calculated at
an | ||||||
7 | agreed-upon rate or index based on such notional amount, | ||||||
8 | interest
shall be projected for such specified period of time | ||||||
9 | on the basis of the
agreed-upon rate
payable by the | ||||||
10 | governmental unit.
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11 | (d) The determination of the sufficiency of enterprise | ||||||
12 | revenues or a
revenue source, as applicable, shall be supported | ||||||
13 | by reference to the most
recent audit of the governmental unit, | ||||||
14 | which shall be for a fiscal year
ending not earlier than 18 | ||||||
15 | months previous to the time of issuance of the
alternate bonds. | ||||||
16 | If such audit does not adequately show such enterprise
revenues | ||||||
17 | or revenue source, as applicable, or if such enterprise | ||||||
18 | revenues
or revenue source, as applicable, are shown to be | ||||||
19 | insufficient, then the
determination of sufficiency shall be | ||||||
20 | supported by the report of an
independent accountant or | ||||||
21 | feasibility analyst, the latter having a national
reputation
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22 | for expertise in such matters, who is not otherwise involved in | ||||||
23 | the project, demonstrating the sufficiency of such
revenues and | ||||||
24 | explaining, if appropriate, by what means the revenues will be
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25 | greater than as shown in the audit. Whenever such sufficiency | ||||||
26 | is
demonstrated by reference to a schedule of higher rates or |
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1 | charges for
enterprise revenues or a higher tax imposition for | ||||||
2 | a revenue source, such
higher rates, charges or taxes shall | ||||||
3 | have been properly imposed by an
ordinance adopted prior to the | ||||||
4 | time of delivery of alternate bonds. The
reference to and | ||||||
5 | acceptance of an audit or report, as the case may be, and
the | ||||||
6 | determination of the governing body as to sufficiency of | ||||||
7 | enterprise
revenues or a revenue source shall be conclusive | ||||||
8 | evidence that the
conditions of this Section have been met and | ||||||
9 | that the alternate bonds
are valid.
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10 | (e) The enterprise revenues or revenue source, as | ||||||
11 | applicable, shall be
in fact pledged to the payment of the | ||||||
12 | alternate bonds; and the governing
body shall covenant, to the | ||||||
13 | extent it is empowered to do so, to provide
for, collect and | ||||||
14 | apply such enterprise revenues or revenue source, as
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15 | applicable, to the payment of the alternate bonds and the | ||||||
16 | provision of
not less than an additional .25 (or .10 for | ||||||
17 | governmental revenue sources)
times debt service. The pledge | ||||||
18 | and
establishment of rates or charges for enterprise revenues, | ||||||
19 | or the
imposition of taxes in a given rate or amount, as | ||||||
20 | provided in this Section
for alternate bonds, shall constitute | ||||||
21 | a continuing obligation of the
governmental unit with respect | ||||||
22 | to such establishment or imposition and a
continuing | ||||||
23 | appropriation of the amounts received. All covenants relating
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24 | to alternate bonds and the conditions and obligations imposed | ||||||
25 | by this
Section are enforceable by any bondholder of alternate | ||||||
26 | bonds affected, any
taxpayer of the governmental unit, and the |
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1 | People of the State of Illinois
acting through the Attorney | ||||||
2 | General or any designee, and in the event that
any such action | ||||||
3 | results in an order finding that the governmental unit has
not | ||||||
4 | properly set rates or charges or imposed taxes to the extent it | ||||||
5 | is
empowered to do so or collected and applied enterprise | ||||||
6 | revenues or any
revenue source, as applicable, as required by | ||||||
7 | this Act, the plaintiff in
any such action shall be awarded | ||||||
8 | reasonable attorney's fees. The intent is
that such enterprise | ||||||
9 | revenues or revenue source, as applicable, shall be
sufficient | ||||||
10 | and shall be applied to the payment of debt service on such
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11 | alternate bonds so that taxes need not be levied, or if levied | ||||||
12 | need not be
extended, for such payment. Nothing in this Section | ||||||
13 | shall inhibit or
restrict the authority of a governing body to | ||||||
14 | determine the lien priority
of any bonds, including alternate | ||||||
15 | bonds, which may be issued with respect
to any enterprise | ||||||
16 | revenues or revenue source.
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17 | In the event that alternate bonds shall have been issued | ||||||
18 | and taxes, other
than a designated revenue source, shall have | ||||||
19 | been extended pursuant to the
general obligation, full faith | ||||||
20 | and credit promise supporting such alternate
bonds, then the | ||||||
21 | amount of such alternate bonds then outstanding shall be
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22 | included in the computation of indebtedness of the governmental | ||||||
23 | unit for
purposes of all statutory provisions or limitations | ||||||
24 | until such time as an
audit of the governmental unit shall show | ||||||
25 | that the alternate bonds have
been paid from the enterprise | ||||||
26 | revenues or revenue source, as applicable,
pledged thereto for |
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1 | a complete fiscal year.
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2 | Alternate bonds may be issued to refund or advance refund | ||||||
3 | alternate bonds
without meeting any of the conditions set forth | ||||||
4 | in this Section, except
that the term of the refunding bonds | ||||||
5 | shall not be longer than the term of
the refunded bonds and | ||||||
6 | that the debt service payable in any year on the
refunding | ||||||
7 | bonds shall not exceed the debt service payable in such year on
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8 | the refunded bonds.
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9 | Once issued, alternate bonds shall be and forever remain | ||||||
10 | until paid or
defeased the general obligation of the | ||||||
11 | governmental unit, for the payment
of which its full faith and | ||||||
12 | credit are pledged, and shall be payable from
the levy of taxes | ||||||
13 | as is provided in this Act for general obligation bonds.
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14 | The changes made by this amendatory Act of 1990 do not | ||||||
15 | affect the
validity of bonds authorized before September 1, | ||||||
16 | 1990.
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17 | (Source: P.A. 97-542, eff. 8-23-11.)
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18 | Section 99. Effective date. This Act takes effect upon | ||||||
19 | becoming law.".
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