Bill Text: IL HB4225 | 2017-2018 | 100th General Assembly | Introduced


Bill Title: Amends the Illinois Municipal Code. Provides that home rule municipalities with a population over 1,000,000 may only authorize the conveyance of all or any portion of sales tax revenues to (i) corporations, trusts, or other entities that have been established for the limited purpose of issuing obligations for the benefit of a home rule municipality, or (ii) a bank or trust company in its capacity as trustee for obligations issued by the bank or trust company for the benefit of a home rule municipality. Effective immediately.

Spectrum: Bipartisan Bill

Status: (Failed) 2019-01-08 - Session Sine Die [HB4225 Detail]

Download: Illinois-2017-HB4225-Introduced.html


100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
HB4225

Introduced , by Rep. Robert Martwick

SYNOPSIS AS INTRODUCED:
65 ILCS 5/8-13-5
65 ILCS 5/8-13-10

Amends the Illinois Municipal Code. Provides that home rule municipalities with a population over 1,000,000 may only authorize the conveyance of all or any portion of sales tax revenues to (i) corporations, trusts, or other entities that have been established for the limited purpose of issuing obligations for the benefit of a home rule municipality, or (ii) a bank or trust company in its capacity as trustee for obligations issued by the bank or trust company for the benefit of a home rule municipality. Effective immediately.
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FISCAL NOTE ACT MAY APPLY

A BILL FOR

HB4225LRB100 15572 AWJ 30653 b
1 AN ACT concerning local government.
2 Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4 Section 5. The Illinois Municipal Code is amended by
5changing Sections 8-13-5 and 8-13-10 as follows:
6 (65 ILCS 5/8-13-5)
7 Sec. 8-13-5. Definitions. As used in this Article:
8 "Assignment agreement" means an agreement between a
9transferring unit and an issuing entity for the conveyance of
10all or part of any revenues or taxes received by the
11transferring unit from a State entity.
12 "Conveyance" means an assignment, sale, transfer, or other
13conveyance.
14 "Deposit account" means a designated escrow account
15established by an issuing entity at a trust company or bank
16having trust powers for the deposit of transferred receipts
17under an assignment agreement.
18 "Issuing entity" means (i) a corporation, trust or other
19entity that has been established for the limited purpose of
20issuing obligations for the benefit of a transferring unit, or
21(ii) a bank or trust company in its capacity as trustee for
22obligations issued by such bank or trust company for the
23benefit of a transferring unit.

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1 "Sales tax" has the meaning given to that term in
2subsection (e) of Section 2 of the Simplified Sales and Use Tax
3Administration Act.
4 "State entity" means the State Comptroller, the State
5Treasurer, or the Illinois Department of Revenue.
6 "Transferred receipts" means all or part of any revenues or
7taxes received from a State entity that have been conveyed by a
8transferring unit under an assignment agreement.
9 "Transferring unit" means a home rule municipality located
10in the State.
11(Source: P.A. 100-23, eff. 7-6-17.)
12 (65 ILCS 5/8-13-10)
13 Sec. 8-13-10. Assignment of receipts.
14 (a) Any transferring unit which receives revenues or taxes
15from a State entity may (to the extent not prohibited by any
16applicable statute, regulation, rule, or agreement governing
17the use of such revenues or taxes) authorize, by ordinance, the
18conveyance of all or any portion of such revenues or taxes to
19an issuing entity, except that transferring units with a
20population over 1,000,000 may only authorize the conveyance of
21all or any portion of sales tax revenues to an issuing entity.
22Any conveyance of transferred receipts shall: (i) be made
23pursuant to an assignment agreement in exchange for the net
24proceeds of obligations issued by the issuing entity for the
25benefit of the transferring unit and shall, for all purposes,

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1constitute an absolute conveyance of all right, title, and
2interest therein; (ii) not be deemed a pledge or other security
3interest for any borrowing by the transferring unit; (iii) be
4valid, binding, and enforceable in accordance with the terms
5thereof and of any related instrument, agreement, or other
6arrangement, including any pledge, grant of security interest,
7or other encumbrance made by the issuing entity to secure any
8obligations issued by the issuing entity for the benefit of the
9transferring unit; and (iv) not be subject to disavowal,
10disaffirmance, cancellation, or avoidance by reason of
11insolvency of any party, lack of consideration, or any other
12fact, occurrence, or State law or rule. On and after the
13effective date of the conveyance of the transferred receipts,
14the transferring unit shall have no right, title or interest in
15or to the transferred receipts conveyed and the transferred
16receipts so conveyed shall be the property of the issuing
17entity to the extent necessary to pay the obligations issued by
18the issuing entity for the benefit of the transferring unit,
19and shall be received, held, and disbursed by the issuing
20entity in a trust fund outside the treasury of the transferring
21unit. An assignment agreement may provide for the periodic
22reconveyance to the transferring unit of amounts of transferred
23receipts remaining after the payment of the obligations issued
24by the issuing entity for the benefit of the transferring unit.
25 (b) In connection with any conveyance of transferred
26receipts, the transferring unit is authorized to direct the

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1applicable State entity to deposit or cause to be deposited any
2amount of such transferred receipts into a deposit account in
3order to secure the obligations issued by the issuing entity
4for the benefit of the transferring unit. Where the
5transferring unit states that such direction is irrevocable,
6the direction shall be treated by the applicable State entity
7as irrevocable with respect to the transferred receipts
8described in such direction. Each State entity shall comply
9with the terms of any such direction received from a
10transferring unit and shall execute and deliver such
11acknowledgments and agreements, including escrow and similar
12agreements, as the transferring unit may require to effectuate
13the deposit of transferred receipts in accordance with the
14direction of the transferring unit.
15 (c) Not later than the date of issuance by an issuing
16entity of any obligations secured by collections of transferred
17receipts, a certified copy of the ordinance authorizing the
18conveyance of the right to receive the transferred receipts,
19together with executed copies of the applicable assignment
20agreement and the agreement providing for the establishment of
21the deposit account, shall be filed with the State entity
22having custody of the transferred receipts.
23(Source: P.A. 100-23, eff. 7-6-17.)
24 Section 99. Effective date. This Act takes effect upon
25becoming law.
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