Bill Text: IL SB0041 | 2017-2018 | 100th General Assembly | Engrossed

Bill Title: Amends the State Finance Act. Makes a technical change in a Section concerning required reports and accounts.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Engrossed) 2017-05-19 - Committee Deadline Extended-Rule 9(b) May 26, 2017 [SB0041 Detail]

Download: Illinois-2017-SB0041-Engrossed.html

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1 AN ACT concerning finance.
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 adding
5Division 13 to Article 8 as follows:
6 (65 ILCS 5/Art. 8 Div. 13 heading new)
8 (65 ILCS 5/8-13-5 new)
9 Sec. 8-13-5. Definitions. As used in this Article:
10 "Assignment agreement" means an agreement between a
11transferring unit and an issuing entity for the conveyance of
12all or part of any revenues or taxes received by the
13transferring unit from a State entity.
14 "Conveyance" means an assignment, sale, transfer, or other
16 "Deposit account" means a designated escrow account
17established by an issuing entity at a trust company or bank
18having trust powers for the deposit of transferred receipts
19under an assignment agreement.
20 "Issuing entity" means (i) a corporation, trust or other
21entity that has been established for the limited purpose of
22issuing obligations for the benefit of a transferring unit, or

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1(ii) a bank or trust company in its capacity as trustee for
2obligations issued by such bank or trust company for the
3benefit of a transferring unit.
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 (65 ILCS 5/8-13-10 new)
12 Sec. 8-13-10. Assignment of receipts.
13 (a) Any transferring unit which receives revenues or taxes
14from a State entity may (to the extent not prohibited by any
15applicable statute, regulation, rule, or agreement governing
16the use of such revenues or taxes) authorize, by ordinance, the
17conveyance of all or any portion of such revenues or taxes to
18an issuing entity. Any conveyance of transferred receipts
19shall: (i) be made pursuant to an assignment agreement in
20exchange for the net proceeds of obligations issued by the
21issuing entity for the benefit of the transferring unit and
22shall, for all purposes, constitute an absolute conveyance of
23all right, title, and interest therein; (ii) not be deemed a
24pledge or other security interest for any borrowing by the
25transferring unit; (iii) be valid, binding, and enforceable in

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

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1for the benefit of the transferring unit. Where the
2transferring unit states that such direction is irrevocable,
3the direction shall be treated by the applicable State entity
4as irrevocable with respect to the transferred receipts
5described in such direction. Each State entity shall comply
6with the terms of any such direction received from a
7transferring unit and shall execute and deliver such
8acknowledgments and agreements, including escrow and similar
9agreements, as the transferring unit may require to effectuate
10the deposit of transferred receipts in accordance with the
11direction of the transferring unit.
12 (c) Not later than the date of issuance by an issuing
13entity of any obligations secured by collections of transferred
14receipts, a certified copy of the ordinance authorizing the
15conveyance of the right to receive the transferred receipts,
16together with executed copies of the applicable assignment
17agreement and the agreement providing for the establishment of
18the deposit account, shall be filed with the State entity
19having custody of the transferred receipts.
20 (65 ILCS 5/8-13-15 new)
21 Sec. 8-13-15. Pledges and agreements of the State. The
22State of Illinois pledges to and agrees with each transferring
23unit and issuing entity that the State will not limit or alter
24the rights and powers vested in the State entities by this
25Article with respect to the disposition of transferred receipts

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1so as to impair the terms of any contract, including any
2assignment agreement, made by the transferring unit with the
3issuing entity or any contract executed by the issuing entity
4in connection with the issuance of obligations by the issuing
5entity for the benefit of the transferring unit until all
6requirements with respect to the deposit by such State entity
7of transferred receipts for the benefit of such issuing entity
8have been fully met and discharged. In addition, the State
9pledges to and agrees with each transferring unit and each
10issuing entity that the State will not limit or alter the basis
11on which transferred receipts are to be paid to the issuing
12entity as provided in this Article, or the use of such funds,
13so as to impair the terms of any such contract. Each
14transferring unit and issuing entity is authorized to include
15these pledges and agreements of the State in any contract
16executed and delivered as described in this Article. In no way
17shall the pledge and agreements of the State be interpreted to
18construe the State as a guarantor of any debt or obligation
19subject to an assignment agreement under this Division.
20 (65 ILCS 5/8-13-20 new)
21 Sec. 8-13-20. Home rule. A home rule unit may not enter
22into assignment agreements in a manner inconsistent with the
23provisions of this Article. This Section is a limitation under
24subsection (i) of Section 6 of Article VII of the Illinois
25Constitution on the concurrent exercise by home rule units of

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1powers and functions exercised by the State.