Bill Text: IL SB2218 | 2017-2018 | 100th General Assembly | Introduced


Bill Title: Creates the Individual Income Tax Bond Act. Authorizes the State to issue, sell, and provide for the retirement of limited obligation bonds in the total principal amount of $6,000,000,000. Provides that the proceeds of those bonds shall be issued for the purposes of providing financial relief to vendors who do business with the State. Amends the State Finance Act to create the Individual Income Tax Bond Proceeds Fund and the Individual Income Tax Bond Retirement and Interest Fund. Amends the Illinois Income Tax Act to provide for the transfer of certain income tax proceeds into the Individual Income Tax Bond Proceeds Fund. Effective immediately.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced) 2017-06-15 - Referred to Assignments [SB2218 Detail]

Download: Illinois-2017-SB2218-Introduced.html


100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
SB2218

Introduced 6/15/2017, by Sen. William E. Brady

SYNOPSIS AS INTRODUCED:
New Act
30 ILCS 105/5.878 new
30 ILCS 105/5.879 new
30 ILCS 105/6z-102 new
35 ILCS 5/901 from Ch. 120, par. 9-901

Creates the Individual Income Tax Bond Act. Authorizes the State to issue, sell, and provide for the retirement of limited obligation bonds in the total principal amount of $6,000,000,000. Provides that the proceeds of those bonds shall be issued for the purposes of providing financial relief to vendors who do business with the State. Amends the State Finance Act to create the Individual Income Tax Bond Proceeds Fund and the Individual Income Tax Bond Retirement and Interest Fund. Amends the Illinois Income Tax Act to provide for the transfer of certain income tax proceeds into the Individual Income Tax Bond Proceeds Fund. Effective immediately.
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FISCAL NOTE ACT MAY APPLY
STATE DEBT IMPACT NOTE ACT MAY APPLY

A BILL FOR

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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 1. Short title. This Act may be cited as the
5Individual Income Tax Bond Act.
6 Section 1.5. Definitions. As used in this Act:
7 "Bonds" means bonds, notes, and other evidences of
8indebtedness of the State of Illinois issued pursuant to this
9Act.
10 "Director" means the Director of the Governor's Office of
11Management and Budget.
12 "Minority owned business", "female owned business", and
13"business owned by a person with a disability" have the
14meanings given to those terms in the Business Enterprise for
15Minorities, Females, and Persons with Disabilities Act.
16 Section 2. Authorization for Bonds. The State of Illinois
17is authorized to issue, sell, and provide for the retirement of
18limited obligation bonds, notes and other evidences of
19indebtedness of the State of Illinois in the total principal
20amount of $6,000,000,000, herein called "Bonds". Such amount of
21authorized Bonds shall be exclusive of any refunding Bonds
22issued pursuant to Section 12 of this Act and exclusive of any

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1Bonds issued pursuant to this Section which are redeemed,
2purchased, advance refunded, or defeased with unexpended Bond
3proceeds in accordance with the final paragraph of Section 11
4of this Act. Bonds shall be issued for the specific purposes
5expressed in Section 4 of this Act. Bonds issued pursuant to
6the authorization contained in this Section 2 shall be issued
7on or before December 31, 2017.
8 Section 3. Findings. The General Assembly hereby makes the
9following findings and determinations:
10 (1) The issuance and sale of Bonds pursuant to this Act
11 is an economical and efficient method of providing
12 financial relief to vendors who do business with the State
13 of Illinois, thereby, among other benefits, reducing the
14 amount of late payment interest to be paid by the State to
15 such vendors.
16 (2) This Act will permit the issuance of Bonds from
17 time to time with varying terms, features, and conditions
18 in order to enhance marketability and lower interest costs
19 incurred by the State. Subsection (a) of Section 6 of this
20 Act authorizes the sale and issuance, from time to time, of
21 Bonds in one or more series, in such principal amounts,
22 bearing interest at such fixed rates or variable rates, and
23 having such other terms and provisions as designated State
24 officers may fix and determine pursuant to the authority
25 delegated under this Act. Subsection (b) of Section 6 of

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1 this Act authorizes, in connection with the issuance of and
2 as security for any series of Bonds, the purchase of bond
3 or interest rate insurance, the establishment of credit and
4 liquidity enhancement arrangements with financial
5 institutions, and participation in interest rate swaps or
6 guarantee agreements or other arrangements to limit
7 interest rate risk.
8 (3) The State's ability to issue Bonds from time to
9 time, without further action by the General Assembly, in
10 separate series, in various principal amounts and with
11 various interest rates, maturities, redemption provisions
12 and other terms will enhance the State's opportunities to
13 obtain such financing as needed, upon favorable terms.
14 Section 4. Purposes of Bonds. As specified in the related
15Bond Sale Order (hereinafter defined), and all as more
16particularly described in Section 11 of this Act, Bonds
17authorized pursuant to Section 2 of this Act shall be issued
18for the purposes of (i) providing financial relief to vendors
19who do business with the State of Illinois by making funds
20available to be used for the purpose of paying outstanding
21invoices due and payable by the State for goods and services
22from time to time, (ii) funding and maintaining debt service
23and reserve funds (hereinafter defined) or (iii) paying
24reasonable expenses of each issuance and sale of the Bonds.

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1 Section 5. Bond Sale Expenses.
2 (a) Proceeds of each Bond sale in an amount not to exceed
30.5% of the principal amount of the Bonds sold in such Bond
4sale are authorized to be used to pay reasonable costs of each
5issuance and sale of Bonds authorized and sold pursuant to this
6Act, including, without limitation, underwriter's discounts
7and fees, but excluding bond insurance, advertising, printing,
8bond rating, security, delivery, legal and financial advisory
9services, initial fees of trustees, registrars, paying agents
10and other fiduciaries, initial costs of credit or liquidity
11enhancement arrangements, initial fees of indexing and
12remarketing agents, and initial costs of interest rate swaps,
13guarantees or arrangements to limit interest rate risk, as
14determined in the related Bond Sale Order; provided, that
15proceeds of the initial sale and issuance of Bonds authorized
16and sold pursuant to this Act are authorized to be used to pay
17travel and other costs incurred by outside vendors in
18connection with the structuring and marketing of such initial
19sale and issuance of Bonds authorized under this act and such
20costs shall not be included in the 0.5% limitation set forth
21above. The Governor's Office of Management and Budget shall
22compile a summary of all costs of issuance on each Bond sale
23(including both costs paid out of proceeds and those paid out
24of appropriated funds) and post that summary on its website
25within 20 business days after the issuance of the Bonds. That
26posting shall be maintained on the web site for a period of at

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1least 30 days. In addition, the Governor's Office of Management
2and Budget shall provide a written copy of each summary of
3costs to the Speaker and Minority Leader of the House of
4Representatives, the President and Minority Leader of the
5Senate, and the Commission on Government Forecasting and
6Accountability within 20 business days after each issuance of
7the Bonds. This summary shall include, as applicable, the
8respective percentage of participation and compensation of
9each underwriter that is a member of the underwriting
10syndicate, legal counsel, financial advisors, and other
11professionals for the Bond issue, and an identification of all
12costs of issuance paid to minority owned businesses, female
13owned businesses, and businesses owned by persons with
14disabilities. The Governor's Office of Management and Budget
15shall provide copies of all contracts under which any costs of
16issuance are paid or to be paid to the Commission on Government
17Forecasting and Accountability within 20 business days after
18the issuance of Bonds for which those costs are paid or to be
19paid. Instead of filing a second or subsequent copy of the same
20contract, the Governor's Office of Management and Budget may
21file a statement that specified costs are paid under specified
22contracts filed earlier with the Commission.
23 (b) The Director shall not, in connection with the issuance
24of Bonds, contract with any underwriter, financial advisor, or
25attorney unless that underwriter, financial advisor, or
26attorney certifies that the underwriter, financial advisor, or

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1attorney has not and will not pay a contingent fee, whether
2directly or indirectly, to any third party for having promoted
3the selection of the underwriter, financial advisor, or
4attorney for that contract. In the event that the Governor's
5Office of Management and Budget determines that an underwriter,
6financial advisor, or attorney has filed a false certification
7with respect to the payment of contingent fees, the Governor's
8Office of Management and Budget shall not contract with that
9underwriter, financial advisor, or attorney, or with any firm
10employing any person who signed such false certification, for a
11period of 2 calendar years, beginning with the date the
12determination is made. The validity of Bonds issued under such
13circumstances of violation pursuant to this Section shall not
14be affected.
15 Section 6. Conditions for Issuance and Sale of Bonds;
16Requirements for Bonds; Master and Supplemental Indentures;
17Credit and Liquidity Enhancement.
18 (a) Bonds shall be issued and sold from time to time, in
19one or more series, in such amounts and at such prices as
20directed by the Governor, upon recommendation by the Director.
21Bonds shall be payable only from the specific sources and
22secured in the manner provided in this Act. Bonds shall be in
23such form, in such denominations, mature on such dates within 8
24years from their date of issuance, be subject to optional or
25mandatory redemption, bear interest payable at such times and

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1at such rate or rates, fixed or variable, and be dated as shall
2be fixed and determined by the Director in an order authorizing
3the issuance and sale of any series of bonds, which order shall
4be approved by the Governor and is referred to in this Act as a
5"Bond Sale Order"; provided, however, that interest payable at
6fixed rates shall not exceed that permitted in the Bond
7Authorization Act, as now or hereafter amended, and interest
8payable at variable rates shall not exceed the maximum rate
9permitted in the Bond Sale Order, notwithstanding the
10provisions of said Bond Authorization Act. Bonds issued under
11this Act shall be payable at such place or places, within or
12without the State of Illinois, and may be made registrable as
13to either principal only or as to both principal and interest,
14as shall be specified in the Bond Sale Order. Bonds may be made
15subject to redemption or subject to purchase and retirement or
16remarketing as fixed and determined in the Bond Sale Order.
17 All Bonds authorized under this Act shall be issued
18pursuant to a master trust indenture (the "Master Indenture")
19executed and delivered on behalf of the State by the Director.
20The Master Indenture shall be in substantially the form
21approved in the Bond Sale Order authorizing the issuance and
22sale of the initial series of Bonds issued under this Act. Such
23initial series of Bonds may, and each subsequent series of
24Bonds shall, also be issued pursuant to a supplemental trust
25indenture (each, a "Supplemental Indenture" and, together with
26the Master Indenture, each an "Indenture") executed and

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1delivered on behalf of the State by the Director, each such
2Supplemental Indenture to be in substantially the form approved
3in the Bond Sale Order relating to such series. The Master
4Indenture and any Supplemental Indenture shall be entered into
5with a bank or trust company in the State of Illinois having
6trust powers and possessing capital and surplus of not less
7than $100,000,000. Such Indentures shall set forth the terms
8and conditions of the Bonds and provide for payment of and
9security for the Bonds, including the establishment and
10maintenance of debt service and reserve funds, and for other
11protections for holders of the Bonds, including without
12limitation, provisions relating to debt service coverage and
13the issuance of parity obligations. The term "reserve funds" as
14used in this Act shall include funds and accounts established
15under Indentures to provide for the payment of principal of and
16premium and interest on Bonds, to provide for the purchase,
17retirement or defeasance of Bonds, to provide for fees of
18trustees, registrars, paying agents, and other fiduciaries and
19to provide for payment of costs of and debt service payable in
20respect of credit or liquidity enhancement arrangements,
21interest rate swaps or guarantees, or financial futures
22contracts and indexing and remarketing agents' services.
23 In the case of any series of Bonds bearing interest at a
24variable interest rate ("Variable Rate Bonds"), in lieu of
25determining the rate or rates at which such series of Variable
26Rate Bonds shall bear interest and the price or prices at which

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1such Variable Rate Bonds shall be initially sold or remarketed
2(in the event of purchase and subsequent resale), the Bond Sale
3Order may provide that such interest rates and prices may vary
4from time to time depending on criteria established in such
5Bond Sale Order, which criteria may include, without
6limitation, references to indices or variations in interest
7rates as may, in the judgment of a remarketing agent, be
8necessary to permit Variable Rate Bonds of such series to be
9remarketed from time to time at a price equal to their
10principal amount (or compound accreted value in the case of
11original issue discount Variable Rate Bonds), and may provide
12for appointment of indexing agents and a bank, trust company,
13investment bank, or other financial institution to serve as
14remarketing agent in connection therewith. The Bond Sale Order
15may provide that alternative interest rates or provisions for
16establishing alternative interest rates, different security or
17claim priorities or different redemption or amortization
18provisions will apply during such times as Bonds of any series
19are held by a person providing credit or liquidity enhancement
20arrangements for such Bonds as authorized in subsection (b) of
21this Section 6.
22 (b) In connection with the issuance of any series of Bonds,
23the State may enter into arrangements to provide additional
24security and liquidity for such Bonds, including, without
25limitation, bond or interest rate insurance or letters of
26credit, lines of credit, bond purchase contracts, or other

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1arrangements whereby funds are made available to retire or
2purchase Bonds, thereby assuring the ability of owners of the
3Bonds to sell, redeem, or receive payment at maturity for their
4Bonds. The State may enter into contracts and may agree to pay
5fees to persons providing such arrangements, but only under
6circumstances where the Director certifies that he or she
7reasonably expects the total interest paid or to be paid on the
8Bonds, together with the fees for the arrangements (being
9treated as if interest), would not, taken together, cause the
10Bonds to bear interest, calculated to their stated maturity, at
11a rate in excess of the rate which the Bonds would bear in the
12absence of such arrangements. Any bonds, notes, or other
13evidences of indebtedness issued pursuant to any such
14arrangements for the purpose of retiring and discharging
15outstanding Bonds shall constitute refunding Bonds under
16Section 12 of this Act. The State may participate in and enter
17into arrangements with respect to interest rate swaps or
18guarantees or financial futures contracts for the purpose of
19limiting or restricting interest rate risk; provided that such
20arrangements shall be made with or executed through banks
21having capital and surplus of not less than $100,000,000 or
22insurance companies holding the highest policyholder rating
23accorded insurers by A.M. Best & Co. or any comparable rating
24service or government bond dealers reporting to, trading with,
25and recognized as primary dealers by a Federal Reserve Bank and
26having capital and surplus of not less than $100,000,000, or

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1other persons whose debt securities are rated in the highest
2long-term categories by both Moody's Investors' Services, Inc.
3and Standard & Poor's Corporation. Agreements incorporating
4any of the foregoing arrangements may be executed and delivered
5by the Director on behalf of the State in substantially the
6form approved in the Bond Sale Order relating to such Bonds.
7 Section 7. Execution of Bonds. Bonds shall be signed by the
8Governor and attested by the Secretary of State under the
9printed facsimile seal of the State and countersigned by the
10State Treasurer by his manual signature or by his duly
11authorized deputy. If Bonds are issued in registered form
12pursuant to the Registered Bond Act, the signatures of the
13Governor, the Secretary of State, and the State Treasurer may
14be printed facsimile signatures. The Master Indenture or any
15Supplemental Indenture may also require that each Bond be
16authenticated by the manual signature of the trustee thereunder
17or of a registrar or paying agent. Unless Bonds are issued in
18fully registered form, interest coupons with facsimile
19signatures of the Governor, Secretary of State, and State
20Treasurer may be attached to the Bonds. The fact that an
21officer whose signature or facsimile thereof appears on a Bond,
22interest coupon, indenture, or agreement authorized under this
23Act no longer holds such office at the time the Bond, coupon,
24indenture, or agreement is delivered shall not invalidate such
25Bond, coupon, indenture or agreement.

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1 Section 8. Sale of Bonds. Bonds, except as otherwise
2provided in this Section, shall be sold from time to time by
3negotiated sale or pursuant to notice of sale and public bid in
4such amounts and at such times as are directed by the Governor,
5upon recommendation by the Director.
6 If any Bonds are to be sold pursuant to negotiated sale,
7the Governor and the Director are hereby each authorized and
8directed to execute and deliver contracts providing for the
9sale of Bonds to underwriters or other negotiated purchasers.
10 If any Bonds are to be sold pursuant to notice of sale and
11public bid, the Director shall cause the sale of the Bonds to
12be advertised by publication in the volume of the Illinois
13Procurement Bulletin that is published by the Department of
14Central Management Services, at least one time not less than 10
15days prior to the date fixed for the opening of the bids. The
16Director may also cause the advertisement of the sale of the
17Bonds in such other manner the Director may determine to
18provide additional reasonable notice of the sale of the Bonds.
19The Director may reschedule the date of public sale upon the
20giving of such additional notice as the Director deems adequate
21to inform prospective bidders of the change; provided, however,
22that all other conditions of the sale shall continue as
23originally advertised.
24 Executed Bonds shall, upon payment therefor, be delivered
25to the purchaser, and the proceeds of Bonds shall be paid into

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1the State Treasury as directed by Section 11 of this Act. The
2Governor and the Director are each hereby authorized and
3directed to execute and deliver such certificates, indentures,
4agreements, and documents, including any supplements or
5amendments thereto, and to take such actions and do such things
6as shall be necessary or desirable to carry out the purposes of
7this Act. Any action authorized or permitted to be taken by the
8Director pursuant to this Act is hereby authorized to be taken
9by any person specifically designated by the Governor to take
10such action in a certificate signed by the Governor and filed
11with the Secretary of State.
12 Section 9. Compliance with the Business Enterprise for
13Minorities, Females, and Persons with Disabilities Act.
14Notwithstanding any other provision of law, the Governor's
15Office of Management and Budget shall comply with all
16applicable provisions of the Business Enterprise for
17Minorities, Females, and Persons with Disabilities Act in
18connection with the sale and issuance of any Bonds under this
19Act. Any failure to comply with such provisions shall not
20affect the validity of Bonds otherwise validly issued under
21this Act.
22 Section 10. Truth in borrowing disclosures.
23 (a) Within 20 business days after the issuance of any Bonds
24under this Act, the Director shall publish a truth in borrowing

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1disclosure that discloses the total principal and interest
2payments to be paid on the Bonds over the full stated term of
3the Bonds. The disclosure shall also include principal and
4interest payments to be made by each fiscal year over the full
5stated term of the Bonds and the total principal and interest
6payments to be made by each fiscal year on all other
7outstanding Bonds issued under this Act over the full stated
8terms of those Bonds.
9 (b) Within 20 business days after the issuance of any
10refunding bonds under Section 12 of this Act, the Director
11shall publish a truth in borrowing disclosure that discloses
12the estimated present-valued savings to be obtained through the
13refunding, in total and by each fiscal year that the refunding
14Bonds may be outstanding.
15 (c) The disclosures required in subsections (a) and (b)
16shall be published by posting the disclosures for no less than
1730 days on the web site of the Governor's Office of Management
18and Budget and by providing the disclosures in written form to
19the Commission on Government Forecasting and Accountability.
20These disclosures shall be calculated assuming Bonds are not
21redeemed or refunded prior to their stated maturities. Amounts
22included in these disclosures as payment of interest on
23variable rate Bonds shall be computed at an interest rate equal
24to the rate at which the variable rate Bonds are first set upon
25issuance, plus 2.5%, after taking into account any credits
26permitted in the related indenture or other instrument against

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1the amount of such interest for each fiscal year. Amounts
2included in these disclosures as payments of interest shall
3include those amounts paid pursuant to arrangements authorized
4pursuant to subsection (b) of Section 6 of this Act.
5 Section 11. Allocation of Proceeds from the Sale of Bonds.
6Proceeds from the sale of Bonds (other than refunding Bonds)
7shall be deposited in the separate fund in the State Treasury
8known as the Individual Income Tax Bond Proceeds Fund and shall
9be transferred by the State Treasurer and the Comptroller of
10the State to the General Revenue Fund and to the Health
11Insurance Reserve Fund at such times and in such amounts as the
12Director shall direct for application to the purposes described
13in clause (i) of Section 4 of this Act.
14 Proceeds to be deposited into any debt service or reserve
15funds (including proceeds from the sale of Bonds to be applied
16to the payment of interest on such Bonds becoming due within
17one year from the date of issuance of those Bonds) as may be
18required under any Indenture shall be paid from the Individual
19Income Tax Bond Proceeds Fund to the trustee under the
20Indenture, as specified in the Bond Sale Order at the time of
21the delivery of the Bonds. Accrued interest paid to the State
22at the time of the delivery of any series of Bonds shall be
23deposited into the Individual Income Tax Bond Retirement and
24Interest Fund in the State Treasury, and shall be paid
25immediately from that Fund to the trustee under the Indenture

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1specified in the related Bond Sale Order.
2 Any unexpended proceeds from any sale of Bonds which are
3held in the Individual Income Tax Bond Proceeds Fund may be
4used to redeem, purchase, advance refund, or defease any Bonds
5outstanding.
6 Section 12. Refunding Bonds. Refunding Bonds are hereby
7authorized for the purpose of refunding any outstanding Bonds,
8including the payment of any redemption premium thereon, any
9reasonable expenses of such refunding, and any interest accrued
10or to accrue to the earliest or any subsequent date of
11redemption or maturity of outstanding Bonds; provided that (i)
12such refunding Bonds must mature within the term of the Bonds
13being refunded and (ii) no refunding Bonds shall be offered for
14sale unless the net present value of debt service savings to be
15achieved by the issuance of the refunding Bonds is 3% or more
16of the principal amount of the refunding Bonds to be issued.
17 Refunding Bonds may be sold in such amounts and at such
18times, as directed by the Governor upon recommendation by the
19Director. The Governor shall notify the State Treasurer and the
20State Comptroller of such refunding. The proceeds received from
21the sale of refunding Bonds shall be used for the retirement at
22maturity or redemption of such outstanding Bonds on any
23maturity or redemption date and, pending such use, shall be
24placed in escrow, subject to such terms and conditions as shall
25be provided for in the Bond Sale Order relating to the

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1refunding Bonds. This Act shall constitute an irrevocable and
2continuing appropriation of all amounts necessary to establish
3an escrow account for the purpose of refunding outstanding
4Bonds and to pay the reasonable expenses of such refunding and
5of the issuance and sale of the refunding Bonds. Any such
6escrowed proceeds may be invested and reinvested in direct
7obligations of the United States of America, maturing at such
8time or times as shall be appropriate to assure the prompt
9payment, when due, of the principal of and interest and
10redemption premium, if any, on the refunded Bonds. After the
11terms of the escrow have been fully satisfied, any remaining
12balance of such proceeds and interest, income and profits
13earned or realized on the investments thereof shall be paid
14into the General Revenue Fund. The liability of the State upon
15the refunded Bonds shall continue, provided that the holders
16thereof shall thereafter be entitled to payment only out of the
17moneys deposited in the escrow account and the refunded Bonds
18shall be deemed paid, discharged, and no longer to be
19outstanding.
20 Except as otherwise herein provided in this Section, such
21refunding Bonds shall in all other respects be issued pursuant
22to and subject to the terms and conditions of this Act and
23shall be secured by and payable from only the funds and sources
24which are provided under this Act.
25 Section 13. Appropriation of Proceeds from Sale of Bonds.

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1All proceeds derived from the sale of Bonds issued pursuant to
2this Act, including (i) those proceeds to be deposited to the
3Individual Income Tax Bond Proceeds Fund for transfer to the
4General Revenue Fund and the Health Insurance Reserve Fund as
5described in Section 4 and Section 11 of this Act, (ii) accrued
6interest paid to the State at the time of the delivery of any
7series of Bonds, and (iii) any other proceeds from the sale of
8Bonds issued pursuant to this Act to pay costs of issuance and
9sale of such Bonds or to make deposits into debt service or
10reserve funds (including proceeds from the sale of Bonds to be
11applied to the payment of interest on such Bonds becoming due
12within one year from the date of issuance of such Bonds) as may
13be required under any Indenture are hereby appropriated and
14authorized to be expended as provided in this Act and in any
15Indentures delivered pursuant to this Act. This Act shall
16constitute an irrevocable and continuing appropriation of all
17amounts necessary for all such purposes set forth in this Act
18and the irrevocable and continuing authority for and direction
19to the State Treasurer and the Comptroller to make the
20necessary transfers and deposits, as directed in each Bond Sale
21Order.
22 Section 14. Repayment.
23 (a) To provide for the repayment of Bonds and required
24deposits into reserve funds required to be maintained as
25security for the Bonds, the Governor shall include an

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1appropriation in each annual State Budget of moneys in such
2amount as shall be necessary and sufficient, for the period
3covered by such State Budget, to pay the interest, as it shall
4accrue, on all Bonds issued under this Act, to pay and
5discharge the principal of such Bonds, including any sinking
6fund redemptions, as shall fall due during such period, to pay
7the premium, if any, on Bonds to be redeemed prior to maturity
8and to make required deposits to any reserve funds required to
9be maintained as security for Bonds or for the purpose of
10retiring or defeasing Bonds, including any replenishments in
11the event of deficiencies in any reserve funds; provided,
12however, that amounts included in such appropriations for
13payment of interest on Variable Rate Bonds shall be the maximum
14amounts of interest which may be payable for the period covered
15by such State Budget after taking into account any credits
16permitted in the related Indenture against the amount of such
17interest required to be appropriated for such period; and
18further provided that such appropriated amount shall not be
19less than the Certified Annual Debt Service Requirement (as
20hereafter defined) for any such fiscal year.
21 (b) A separate fund in the State Treasury called the
22Individual Income Tax Bond Retirement and Interest Fund is
23hereby created.
24 (c) The General Assembly shall annually make
25appropriations to pay the principal of and interest and
26premium, if any, on the Bonds sold under this Act and to make

SB2218- 20 -LRB100 12689 HLH 27541 b
1required deposits into reserve funds required to be maintained
2as security for the Bonds from the Individual Income Tax Bond
3Retirement and Interest Fund in such amounts as shall be
4necessary and sufficient to pay the principal of and interest
5and premium, if any, on the Bonds coming due in each such
6fiscal year, including any sinking fund redemptions, and to
7make required deposits to reserve funds for the purpose of
8securing Bonds or retiring or defeasing Bonds, including
9replenishment of any deficiencies therein; provided, however,
10that amounts included in such appropriations for payment of
11interest on Variable Rate Bonds shall be the maximum amounts of
12interest which may be payable during such fiscal year after
13taking into account any credits permitted in the related
14indenture against the amount of such interest required to be
15appropriated for such period; and, further provided, that such
16appropriated amount shall not be less than the Certified Annual
17Debt Service Requirement for any such fiscal year. If for any
18reason the State Treasurer and Comptroller fail to (i) credit
19amounts to the Individual Income Tax Bond Fund in the State
20Treasury created under Section 6z-102 of the State Finance Act,
21as required by Section 6z-102 of said State Finance Act, or
22(ii) make transfers to the Individual Income Tax Bond
23Retirement and Interest Fund from the Individual Income Tax
24Bond Fund as required by paragraph (d) of Section 6z-102 of
25said State Finance Act or (iii) make payments from the
26Individual Income Tax Bond Retirement and Interest Fund to the

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1trustee under the Master Indenture as required by Section 16 of
2this Act, or if for any reason the General Assembly fails to
3make appropriations from the Individual Income Tax Bond
4Retirement and Interest Fund sufficient to pay the principal of
5and interest and premium, if any, on the Bonds, as the same by
6their terms shall become due, and to make required deposits
7into reserve funds required to be maintained as security for
8the Bonds or to retire or defease Bonds, including
9replenishment of any deficiencies, this Act shall constitute an
10irrevocable and continuing appropriation of all amounts
11necessary for all of the above purposes, and the irrevocable
12and continuing authority for and direction to the State
13Treasurer and the State Comptroller to make the necessary
14transfers and deposits, as directed by the Governor, from the
15sources specified in Section 6z-102 of the State Finance Act to
16the Individual Income Tax Bond Fund and from the Individual
17Income Tax Bond Fund to the Individual Income Tax Bond
18Retirement and Interest Fund and to make the necessary payments
19from the Individual Income Tax Bond Retirement and Interest
20Fund to the trustee under the Master Indenture.
21 Section 15. Bonds as Limited Obligations of the State. All
22Bonds issued in accordance with this Act shall be direct,
23limited obligations of the State of Illinois payable solely
24from and secured by an irrevocable, first priority pledge of
25and lien on moneys on deposit in (i) the Individual Income Tax

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1Bond Retirement and Interest Fund and (ii) any fund or account
2maintained pursuant to any Indenture securing any Bonds to the
3extent so provided in such Indenture; provided, however, that
4Bonds of any series may be secured on a parity basis with, or
5on a senior or junior basis with respect to, any other series
6of Bonds as provided in the Bond Sale Order and Indenture
7relating to such series. The State of Illinois hereby pledges
8the tax revenues and other moneys from whatever source which by
9law are required to be deposited into the Individual Income Tax
10Bond Fund for the purposes of making transfers to and payments
11from the Individual Income Tax Bond Retirement and Interest
12Fund as required by Section 6z-102 of the Finance Act, such
13pledge constituting a first and prior claim against and charge
14on such tax revenues and other moneys. The Bonds are not
15general obligations of the State and are not secured by a
16pledge of the full faith and credit of the State and, except as
17specifically provided in this Act and Section 6z-102 of the
18State Finance Act, the holders of Bonds may not require the
19levy or imposition of any taxes or the application of other
20State revenues or funds to the payment of Bonds. Each Bond
21shall describe the limited nature of the State's obligation on
22the face thereof. The Bonds shall be securities appropriate and
23acceptable for collateral as described in Section 6 of the
24Public Funds Investment Act, as amended, or in any similar Act
25providing for the collateralization of public funds.
26 The Bonds are hereby made securities in which all public

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1officers and bodies of the State and all political subdivisions
2of the State and other persons carrying on an insurance
3business, all banks, bankers, trust companies, saving banks and
4savings associations, including savings and loan associations,
5building and loan associations, investment companies and other
6persons carrying on a banking business, all credit unions,
7pension funds, administrators, and guardians who are now or may
8hereafter be authorized to invest in bonds or in other
9obligations of the State, may properly and legally invest
10funds, including capital, in their control or belonging to
11them. The Bonds are also hereby made securities which may be
12deposited with and may be received by all public officers and
13bodies of the State and all political subdivisions of the State
14and public corporations for any purpose for which the deposit
15of bonds or other obligations of the State is now or may
16hereafter be authorized.
17 Section 16. Computation of Principal and Interest;
18Transfer from Individual Income Tax Bond Fund; Payment from
19Individual Income Tax Bond Retirement and Interest Fund. Upon
20each delivery of Bonds authorized to be issued under this Act,
21the trustee under the Master Indenture shall compute and
22certify to the Director, the Comptroller, and the State
23Treasurer (i) the total amount of the principal of and the
24interest and the premium, if any, on the Bonds then being
25issued and on Bonds previously issued and outstanding that will

SB2218- 24 -LRB100 12689 HLH 27541 b
1be payable in order to retire such Bonds at their stated
2maturities or mandatory sinking fund payment dates and (ii) the
3amount of principal of and interest and premium, if any, on
4such Bonds that will be payable on each principal, interest,
5and mandatory sinking fund payment date according to the tenor
6of such Bonds during the then current and each succeeding
7fiscal year. Such certifications shall include with respect to
8interest payable on Variable Rate Bonds the maximum amount of
9interest which may be payable for the relevant period after
10taking into account any credits permitted in the related
11indenture against the amount of such interest required to be
12appropriated for such period pursuant to subsection (c) of
13Section 14 of this Act.
14 On the date of the initial issuance of Bonds pursuant to
15this Act and on or before June 20 of each year thereafter so
16long as Bonds remain outstanding, the trustee under the Master
17Indenture shall deliver to the Director, the Comptroller and
18the State Treasurer a certificate setting forth the Certified
19Annual Debt Service Requirement and each Monthly Transfer
20Amount (each as defined below) for the next succeeding fiscal
21year. If Bonds are issued subsequent to the delivery of any
22such certificate, upon the issuance of such Bonds, the trustee
23under the Master Indenture shall deliver a supplemental
24certificate setting forth the revisions, if any, in the
25Certified Annual Debt Service Requirement resulting from the
26issuance of such Bonds.

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1 The "Certified Annual Debt Service Requirement" for any
2fiscal year shall be an amount equal to (i) the aggregate
3amount of principal, interest and premium, if any, payable on
4outstanding Bonds during such fiscal year plus (ii) the amount
5required to be deposited into any reserve fund securing such
6Bonds or for the purpose of retiring or defeasing such Bonds
7plus (iii) the amount of any deficiencies in required transfers
8of amounts described in clauses (i) and (ii) for any prior
9fiscal year, minus (iv) the amount, if any, of such interest to
10be paid from Bond proceeds on deposit under any Indenture;
11provided, however, that interest payable on Variable Rate Bonds
12shall be calculated at the maximum rate of interest which may
13be payable during such fiscal year after taking into account
14any credits permitted in the related Indenture against the
15amount of such interest required to be appropriated for such
16period pursuant to subsection (c) of Section 14 of this Act.
17 In each month in which Bonds are outstanding, the State
18Treasurer and Comptroller shall transfer, in accordance with
19section 6z-102(d) of the State Finance Act, from the Individual
20Income Tax Bond Fund to the Individual Income Tax Bond
21Retirement and Interest Fund, and shall make payment from the
22Individual Income Tax Bond Retirement and Interest Fund to the
23trustee under the Master Indenture of, an amount equal to
241/12th (or such greater fractional amount where the numerator
25is 1 and the denominator is the number of whole months to the
26first payment date, if such first payment date is less than one

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1year from the date of issuance) of 125% of the Certified Annual
2Debt Service Requirement, plus any cumulative deficiency in
3such transfers and payments for prior months (the amount of
4such monthly transfer being referred to as the "Monthly
5Transfer Amount"); provided that such transfers and payments
6for any such fiscal year shall not exceed the Certified Annual
7Debt Service Requirement.
8 Section 17. State Covenant. The State of Illinois
9irrevocably covenants and agrees with the holders of Bonds
10issued pursuant to this Act that the State will not limit or
11alter (i) the basis on which the taxes and revenues of the
12State are required to be collected and deposited in the
13Individual Income Tax Bond Fund under the State Finance Act and
14to be credited to and transferred from the Individual Income
15Tax Bond Fund pursuant to paragraph (d) of Section 6z-102 of
16the State Finance Act; (ii) the basis on which transfers of
17amounts credited to the Individual Income Tax Bond Fund are
18required to be made to the Individual Income Tax Bond
19Retirement and Interest Fund; (iii) the purposes of the
20Individual Income Tax Bond Retirement and Interest Fund; or
21(iv) the provisions of this Section 17, or of Sections 14, 15,
22and 16 of this Act or the provisions of Section 6z-102 of the
23State Finance Act, as amended, so as to impair, in any of the
24foregoing respects, the obligations of contract incurred by the
25State in favor of the holders of Bonds issued under this Act;

SB2218- 27 -LRB100 12689 HLH 27541 b
1provided that no such limitation or alteration described above
2shall operate to cause the revenues pledged under this Act to
3the payment of the Bonds in any fiscal year to be below the
4level required to satisfy the debt service and Indenture
5deposit requirements with respect to all outstanding Bonds. The
6covenant and agreement set forth in this Section may be
7included in any Bond Sale Order, trust indenture, agreement or
8Bond authorized under this Act.
9 Section 18. Compel Payment; Remedies of Bondholders. If the
10State fails to pay the principal of or interest on any of the
11Bonds or premium, if any, as the same become due, a civil
12action to compel payment may be instituted in the Supreme Court
13of Illinois as a court of original jurisdiction by the holder
14or holders of the Bonds on which such default of payment exists
15or by the trustee under an Indenture trustee acting on behalf
16of such holders. Delivery of a summons and a copy of the
17complaint to the Attorney General shall constitute sufficient
18service to give the Supreme Court of Illinois jurisdiction of
19the subject matter of such a suit and jurisdiction over the
20State and its officers named as defendants for the purpose of
21compelling such payment. Any case, controversy, or cause of
22action concerning the validity of this Act relates to the
23revenue of the State of Illinois.
24 If the Supreme Court of Illinois denies the holder or
25holders of Bonds or a trustee under an Indenture acting on

SB2218- 28 -LRB100 12689 HLH 27541 b
1their behalf leave to file an original action in the Supreme
2Court, the Bond holder or holders or such indenture trustee may
3bring the action in the Circuit Court of Sangamon County.
4 Section 19. Investment of Moneys Not needed for Current
5Expenditures; Application of Earnings.
6 (a) The State Treasurer may, with the Governor's approval,
7invest and reinvest any moneys on deposit in the Individual
8Income Tax Bond Proceeds Fund and the Individual Income Tax
9Bond Retirement and Interest Fund in the State Treasury which
10are not needed for current expenditures due or about to become
11due from such funds. Earnings or interest income from
12investments in the Individual Income Tax Bond Proceeds Fund
13shall be deposited by the State Treasurer in the General
14Revenue Fund. Earnings or interest income from investments in
15the Individual Income Tax Bond Retirement and Interest Fund
16shall be deposited in the Individual Income Tax Bond Retirement
17and Interest Fund. Upon the direction of the Governor or his or
18her authorized representative, the State Treasurer and
19Comptroller shall transfer from the Individual Income Tax Bond
20Retirement and Interest Fund all such earnings or interest
21income derived from investments in the Individual Income Tax
22Bond Retirement and Interest Fund to the trustee under the
23Master Indenture.
24 (b) Moneys in the Individual Income Tax Bond Proceeds Fund
25may be invested as permitted in the Deposit of State Moneys Act

SB2218- 29 -LRB100 12689 HLH 27541 b
1and in the Public Funds Investment Act. Moneys on deposit in
2the Individual Income Tax Bond Retirement and Interest Fund may
3be invested in securities constituting direct obligations of
4the United States Government, or in obligations the principal
5of and interest on which are guaranteed by the United States
6Government, or in certificates of deposit of any state or
7national bank which are fully secured by obligations of, or
8guaranteed as to principal and interest by, the United States
9Government. Moneys on deposit with a trustee and held subject
10to an Indenture shall be invested in accordance with the above
11laws and the provisions of such Indenture.
12 Section 900. The State Finance Act is amended by adding
13Sections 5.878, 5.879, and 6z-102 as follows:
14 (30 ILCS 105/5.878 new)
15 Sec. 5.878. The Individual Income Tax Bond Fund.
16 (30 ILCS 105/5.879 new)
17 Sec. 5.879. Individual Income Tax Bond Retirement and
18Interest Fund.
19 (30 ILCS 105/6z-102 new)
20 Sec. 6z-102. Individual Income Tax Bond Fund.
21 (a) The Individual Income Tax Bond Fund is created in the
22State Treasury. All tax revenues which by law are required to

SB2218- 30 -LRB100 12689 HLH 27541 b
1be deposited in the Individual Income Tax Bond Fund shall be
2paid into the Individual Income Tax Bond Fund upon their
3collection, payment or other receipt as provided by law,
4including the pledge set forth in Section 15 of the Individual
5Income Tax Bond Act. All tax revenues paid into the Individual
6Income Tax Bond Fund shall be promptly invested by the State
7Treasurer in accordance with law, and all interest or other
8earnings accruing or received thereon shall be credited to and
9paid into the Individual Income Tax Bond Fund. No tax revenues,
10interest or earnings paid into the Individual Income Tax Bond
11Fund shall be transferred or allocated by the Comptroller or
12State Treasurer to any other fund, nor shall the Governor
13authorize any such transfer or allocation, nor shall any tax
14revenues or other moneys, interest or earnings paid into the
15Individual Income Tax Bond Fund be used, temporarily or
16otherwise, for interfund borrowing, or be otherwise used or
17appropriated, except as expressly authorized and provided in
18paragraphs (c) and (d) of this Section for the sole purposes
19and subject to the priorities, limitations and conditions
20prescribed therein.
21 (b) The tax revenues shall be paid into the Individual
22Income Tax Bond Fund pursuant to subsection (i) of Section 901
23of the Illinois Income Tax Act.
24 (c) All moneys in the Individual Income Tax Bond Fund shall
25be transferred, appropriated, and used only for the purposes
26authorized by and subject to the limitations and conditions

SB2218- 31 -LRB100 12689 HLH 27541 b
1prescribed by this Section.
2 (d) Transfers from the Individual Income Tax Bond Fund. So
3long as limited obligation bonds of the State issued under the
4Individual Income Tax Bond Act remain outstanding, during each
5calendar month, when the amount on deposit in the Individual
6Income Tax Bond Fund is equal to or exceeds the Monthly
7Transfer Amount for the then-current month, the Comptroller
8shall order transferred and the Treasurer shall transfer from
9the Individual Income Tax Bond Fund to the Individual Income
10Tax Bond Retirement and Interest Fund in the State Treasury an
11amount equal to the Monthly Transfer Amount as required to be
12so transferred in that month under Section 16 of the Individual
13Income Tax Bond Act.
14 During each calendar month beginning 3 days after funds
15sufficient to satisfy the Monthly Transfer Amount for the
16then-current month have been transferred from the Individual
17Income Tax Bond Fund to the Individual Income Tax Bond
18Retirement and Interest Fund as described in the preceding
19paragraph of this Section and Section 16 of the Individual
20Income Tax Bond Act and continuing until the last day of the
21then-current month, all amounts on deposit or deposited in the
22Individual Income Tax Bond Fund shall be transferred by the
23State Treasurer and the State Comptroller to the General
24Revenue Fund.
25 Section 905. The Illinois Income Tax Act is amended by

SB2218- 32 -LRB100 12689 HLH 27541 b
1changing Section 901 as follows:
2 (35 ILCS 5/901) (from Ch. 120, par. 9-901)
3 Sec. 901. Collection authority.
4 (a) In general.
5 The Department shall collect the taxes imposed by this Act.
6The Department shall collect certified past due child support
7amounts under Section 2505-650 of the Department of Revenue Law
8(20 ILCS 2505/2505-650). Except as provided in subsections (c),
9(e), (f), (g), and (h), and (i) of this Section, money
10collected pursuant to subsections (a) and (b) of Section 201 of
11this Act shall be paid into the General Revenue Fund in the
12State treasury; money collected pursuant to subsections (c) and
13(d) of Section 201 of this Act shall be paid into the Personal
14Property Tax Replacement Fund, a special fund in the State
15Treasury; and money collected under Section 2505-650 of the
16Department of Revenue Law (20 ILCS 2505/2505-650) shall be paid
17into the Child Support Enforcement Trust Fund, a special fund
18outside the State Treasury, or to the State Disbursement Unit
19established under Section 10-26 of the Illinois Public Aid
20Code, as directed by the Department of Healthcare and Family
21Services.
22 (b) Local Government Distributive Fund.
23 Beginning August 1, 1969, and continuing through June 30,
241994, the Treasurer shall transfer each month from the General
25Revenue Fund to a special fund in the State treasury, to be

SB2218- 33 -LRB100 12689 HLH 27541 b
1known as the "Local Government Distributive Fund", an amount
2equal to 1/12 of the net revenue realized from the tax imposed
3by subsections (a) and (b) of Section 201 of this Act during
4the preceding month. Beginning July 1, 1994, and continuing
5through June 30, 1995, the Treasurer shall transfer each month
6from the General Revenue Fund to the Local Government
7Distributive Fund an amount equal to 1/11 of the net revenue
8realized from the tax imposed by subsections (a) and (b) of
9Section 201 of this Act during the preceding month. Beginning
10July 1, 1995 and continuing through January 31, 2011, the
11Treasurer shall transfer each month from the General Revenue
12Fund to the Local Government Distributive Fund an amount equal
13to the net of (i) 1/10 of the net revenue realized from the tax
14imposed by subsections (a) and (b) of Section 201 of the
15Illinois Income Tax Act during the preceding month (ii) minus,
16beginning July 1, 2003 and ending June 30, 2004, $6,666,666,
17and beginning July 1, 2004, zero. Beginning February 1, 2011,
18and continuing through January 31, 2015, the Treasurer shall
19transfer each month from the General Revenue Fund to the Local
20Government Distributive Fund an amount equal to the sum of (i)
216% (10% of the ratio of the 3% individual income tax rate prior
22to 2011 to the 5% individual income tax rate after 2010) of the
23net revenue realized from the tax imposed by subsections (a)
24and (b) of Section 201 of this Act upon individuals, trusts,
25and estates during the preceding month and (ii) 6.86% (10% of
26the ratio of the 4.8% corporate income tax rate prior to 2011

SB2218- 34 -LRB100 12689 HLH 27541 b
1to the 7% corporate income tax rate after 2010) of the net
2revenue realized from the tax imposed by subsections (a) and
3(b) of Section 201 of this Act upon corporations during the
4preceding month. Beginning February 1, 2015 and continuing
5through January 31, 2025, the Treasurer shall transfer each
6month from the General Revenue Fund to the Local Government
7Distributive Fund an amount equal to the sum of (i) 8% (10% of
8the ratio of the 3% individual income tax rate prior to 2011 to
9the 3.75% individual income tax rate after 2014) of the net
10revenue realized from the tax imposed by subsections (a) and
11(b) of Section 201 of this Act upon individuals, trusts, and
12estates during the preceding month and (ii) 9.14% (10% of the
13ratio of the 4.8% corporate income tax rate prior to 2011 to
14the 5.25% corporate income tax rate after 2014) of the net
15revenue realized from the tax imposed by subsections (a) and
16(b) of Section 201 of this Act upon corporations during the
17preceding month. Beginning February 1, 2025, the Treasurer
18shall transfer each month from the General Revenue Fund to the
19Local Government Distributive Fund an amount equal to the sum
20of (i) 9.23% (10% of the ratio of the 3% individual income tax
21rate prior to 2011 to the 3.25% individual income tax rate
22after 2024) of the net revenue realized from the tax imposed by
23subsections (a) and (b) of Section 201 of this Act upon
24individuals, trusts, and estates during the preceding month and
25(ii) 10% of the net revenue realized from the tax imposed by
26subsections (a) and (b) of Section 201 of this Act upon

SB2218- 35 -LRB100 12689 HLH 27541 b
1corporations during the preceding month. Net revenue realized
2for a month shall be defined as the revenue from the tax
3imposed by subsections (a) and (b) of Section 201 of this Act
4which is deposited in the General Revenue Fund, the Education
5Assistance Fund, the Income Tax Surcharge Local Government
6Distributive Fund, the Fund for the Advancement of Education,
7and the Commitment to Human Services Fund during the month
8minus the amount paid out of the General Revenue Fund in State
9warrants during that same month as refunds to taxpayers for
10overpayment of liability under the tax imposed by subsections
11(a) and (b) of Section 201 of this Act.
12 Beginning on August 26, 2014 (the effective date of Public
13Act 98-1052), the Comptroller shall perform the transfers
14required by this subsection (b) no later than 60 days after he
15or she receives the certification from the Treasurer as
16provided in Section 1 of the State Revenue Sharing Act.
17 (c) Deposits Into Income Tax Refund Fund.
18 (1) Beginning on January 1, 1989 and thereafter, the
19 Department shall deposit a percentage of the amounts
20 collected pursuant to subsections (a) and (b)(1), (2), and
21 (3), of Section 201 of this Act into a fund in the State
22 treasury known as the Income Tax Refund Fund. The
23 Department shall deposit 6% of such amounts during the
24 period beginning January 1, 1989 and ending on June 30,
25 1989. Beginning with State fiscal year 1990 and for each
26 fiscal year thereafter, the percentage deposited into the

SB2218- 36 -LRB100 12689 HLH 27541 b
1 Income Tax Refund Fund during a fiscal year shall be the
2 Annual Percentage. For fiscal years 1999 through 2001, the
3 Annual Percentage shall be 7.1%. For fiscal year 2003, the
4 Annual Percentage shall be 8%. For fiscal year 2004, the
5 Annual Percentage shall be 11.7%. Upon the effective date
6 of this amendatory Act of the 93rd General Assembly, the
7 Annual Percentage shall be 10% for fiscal year 2005. For
8 fiscal year 2006, the Annual Percentage shall be 9.75%. For
9 fiscal year 2007, the Annual Percentage shall be 9.75%. For
10 fiscal year 2008, the Annual Percentage shall be 7.75%. For
11 fiscal year 2009, the Annual Percentage shall be 9.75%. For
12 fiscal year 2010, the Annual Percentage shall be 9.75%. For
13 fiscal year 2011, the Annual Percentage shall be 8.75%. For
14 fiscal year 2012, the Annual Percentage shall be 8.75%. For
15 fiscal year 2013, the Annual Percentage shall be 9.75%. For
16 fiscal year 2014, the Annual Percentage shall be 9.5%. For
17 fiscal year 2015, the Annual Percentage shall be 10%. For
18 all other fiscal years, the Annual Percentage shall be
19 calculated as a fraction, the numerator of which shall be
20 the amount of refunds approved for payment by the
21 Department during the preceding fiscal year as a result of
22 overpayment of tax liability under subsections (a) and
23 (b)(1), (2), and (3) of Section 201 of this Act plus the
24 amount of such refunds remaining approved but unpaid at the
25 end of the preceding fiscal year, minus the amounts
26 transferred into the Income Tax Refund Fund from the

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1 Tobacco Settlement Recovery Fund, and the denominator of
2 which shall be the amounts which will be collected pursuant
3 to subsections (a) and (b)(1), (2), and (3) of Section 201
4 of this Act during the preceding fiscal year; except that
5 in State fiscal year 2002, the Annual Percentage shall in
6 no event exceed 7.6%. The Director of Revenue shall certify
7 the Annual Percentage to the Comptroller on the last
8 business day of the fiscal year immediately preceding the
9 fiscal year for which it is to be effective.
10 (2) Beginning on January 1, 1989 and thereafter, the
11 Department shall deposit a percentage of the amounts
12 collected pursuant to subsections (a) and (b)(6), (7), and
13 (8), (c) and (d) of Section 201 of this Act into a fund in
14 the State treasury known as the Income Tax Refund Fund. The
15 Department shall deposit 18% of such amounts during the
16 period beginning January 1, 1989 and ending on June 30,
17 1989. Beginning with State fiscal year 1990 and for each
18 fiscal year thereafter, the percentage deposited into the
19 Income Tax Refund Fund during a fiscal year shall be the
20 Annual Percentage. For fiscal years 1999, 2000, and 2001,
21 the Annual Percentage shall be 19%. For fiscal year 2003,
22 the Annual Percentage shall be 27%. For fiscal year 2004,
23 the Annual Percentage shall be 32%. Upon the effective date
24 of this amendatory Act of the 93rd General Assembly, the
25 Annual Percentage shall be 24% for fiscal year 2005. For
26 fiscal year 2006, the Annual Percentage shall be 20%. For

SB2218- 38 -LRB100 12689 HLH 27541 b
1 fiscal year 2007, the Annual Percentage shall be 17.5%. For
2 fiscal year 2008, the Annual Percentage shall be 15.5%. For
3 fiscal year 2009, the Annual Percentage shall be 17.5%. For
4 fiscal year 2010, the Annual Percentage shall be 17.5%. For
5 fiscal year 2011, the Annual Percentage shall be 17.5%. For
6 fiscal year 2012, the Annual Percentage shall be 17.5%. For
7 fiscal year 2013, the Annual Percentage shall be 14%. For
8 fiscal year 2014, the Annual Percentage shall be 13.4%. For
9 fiscal year 2015, the Annual Percentage shall be 14%. For
10 all other fiscal years, the Annual Percentage shall be
11 calculated as a fraction, the numerator of which shall be
12 the amount of refunds approved for payment by the
13 Department during the preceding fiscal year as a result of
14 overpayment of tax liability under subsections (a) and
15 (b)(6), (7), and (8), (c) and (d) of Section 201 of this
16 Act plus the amount of such refunds remaining approved but
17 unpaid at the end of the preceding fiscal year, and the
18 denominator of which shall be the amounts which will be
19 collected pursuant to subsections (a) and (b)(6), (7), and
20 (8), (c) and (d) of Section 201 of this Act during the
21 preceding fiscal year; except that in State fiscal year
22 2002, the Annual Percentage shall in no event exceed 23%.
23 The Director of Revenue shall certify the Annual Percentage
24 to the Comptroller on the last business day of the fiscal
25 year immediately preceding the fiscal year for which it is
26 to be effective.

SB2218- 39 -LRB100 12689 HLH 27541 b
1 (3) The Comptroller shall order transferred and the
2 Treasurer shall transfer from the Tobacco Settlement
3 Recovery Fund to the Income Tax Refund Fund (i) $35,000,000
4 in January, 2001, (ii) $35,000,000 in January, 2002, and
5 (iii) $35,000,000 in January, 2003.
6 (d) Expenditures from Income Tax Refund Fund.
7 (1) Beginning January 1, 1989, money in the Income Tax
8 Refund Fund shall be expended exclusively for the purpose
9 of paying refunds resulting from overpayment of tax
10 liability under Section 201 of this Act, for paying rebates
11 under Section 208.1 in the event that the amounts in the
12 Homeowners' Tax Relief Fund are insufficient for that
13 purpose, and for making transfers pursuant to this
14 subsection (d).
15 (2) The Director shall order payment of refunds
16 resulting from overpayment of tax liability under Section
17 201 of this Act from the Income Tax Refund Fund only to the
18 extent that amounts collected pursuant to Section 201 of
19 this Act and transfers pursuant to this subsection (d) and
20 item (3) of subsection (c) have been deposited and retained
21 in the Fund.
22 (3) As soon as possible after the end of each fiscal
23 year, the Director shall order transferred and the State
24 Treasurer and State Comptroller shall transfer from the
25 Income Tax Refund Fund to the Personal Property Tax
26 Replacement Fund an amount, certified by the Director to

SB2218- 40 -LRB100 12689 HLH 27541 b
1 the Comptroller, equal to the excess of the amount
2 collected pursuant to subsections (c) and (d) of Section
3 201 of this Act deposited into the Income Tax Refund Fund
4 during the fiscal year over the amount of refunds resulting
5 from overpayment of tax liability under subsections (c) and
6 (d) of Section 201 of this Act paid from the Income Tax
7 Refund Fund during the fiscal year.
8 (4) As soon as possible after the end of each fiscal
9 year, the Director shall order transferred and the State
10 Treasurer and State Comptroller shall transfer from the
11 Personal Property Tax Replacement Fund to the Income Tax
12 Refund Fund an amount, certified by the Director to the
13 Comptroller, equal to the excess of the amount of refunds
14 resulting from overpayment of tax liability under
15 subsections (c) and (d) of Section 201 of this Act paid
16 from the Income Tax Refund Fund during the fiscal year over
17 the amount collected pursuant to subsections (c) and (d) of
18 Section 201 of this Act deposited into the Income Tax
19 Refund Fund during the fiscal year.
20 (4.5) As soon as possible after the end of fiscal year
21 1999 and of each fiscal year thereafter, the Director shall
22 order transferred and the State Treasurer and State
23 Comptroller shall transfer from the Income Tax Refund Fund
24 to the General Revenue Fund any surplus remaining in the
25 Income Tax Refund Fund as of the end of such fiscal year;
26 excluding for fiscal years 2000, 2001, and 2002 amounts

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1 attributable to transfers under item (3) of subsection (c)
2 less refunds resulting from the earned income tax credit.
3 (5) This Act shall constitute an irrevocable and
4 continuing appropriation from the Income Tax Refund Fund
5 for the purpose of paying refunds upon the order of the
6 Director in accordance with the provisions of this Section.
7 (e) Deposits into the Education Assistance Fund and the
8Income Tax Surcharge Local Government Distributive Fund.
9 On July 1, 1991, and thereafter, of the amounts collected
10pursuant to subsections (a) and (b) of Section 201 of this Act,
11minus deposits into the Income Tax Refund Fund, the Department
12shall deposit 7.3% into the Education Assistance Fund in the
13State Treasury. Beginning July 1, 1991, and continuing through
14January 31, 1993, of the amounts collected pursuant to
15subsections (a) and (b) of Section 201 of the Illinois Income
16Tax Act, minus deposits into the Income Tax Refund Fund, the
17Department shall deposit 3.0% into the Income Tax Surcharge
18Local Government Distributive Fund in the State Treasury.
19Beginning February 1, 1993 and continuing through June 30,
201993, of the amounts collected pursuant to subsections (a) and
21(b) of Section 201 of the Illinois Income Tax Act, minus
22deposits into the Income Tax Refund Fund, the Department shall
23deposit 4.4% into the Income Tax Surcharge Local Government
24Distributive Fund in the State Treasury. Beginning July 1,
251993, and continuing through June 30, 1994, of the amounts
26collected under subsections (a) and (b) of Section 201 of this

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1Act, minus deposits into the Income Tax Refund Fund, the
2Department shall deposit 1.475% into the Income Tax Surcharge
3Local Government Distributive Fund in the State Treasury.
4 (f) Deposits into the Fund for the Advancement of
5Education. Beginning February 1, 2015, the Department shall
6deposit the following portions of the revenue realized from the
7tax imposed upon individuals, trusts, and estates by
8subsections (a) and (b) of Section 201 of this Act during the
9preceding month, minus deposits into the Income Tax Refund
10Fund, into the Fund for the Advancement of Education:
11 (1) beginning February 1, 2015, and prior to February
12 1, 2025, 1/30; and
13 (2) beginning February 1, 2025, 1/26.
14 If the rate of tax imposed by subsection (a) and (b) of
15Section 201 is reduced pursuant to Section 201.5 of this Act,
16the Department shall not make the deposits required by this
17subsection (f) on or after the effective date of the reduction.
18 (g) Deposits into the Commitment to Human Services Fund.
19Beginning February 1, 2015, the Department shall deposit the
20following portions of the revenue realized from the tax imposed
21upon individuals, trusts, and estates by subsections (a) and
22(b) of Section 201 of this Act during the preceding month,
23minus deposits into the Income Tax Refund Fund, into the
24Commitment to Human Services Fund:
25 (1) beginning February 1, 2015, and prior to February
26 1, 2025, 1/30; and

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1 (2) beginning February 1, 2025, 1/26.
2 If the rate of tax imposed by subsection (a) and (b) of
3Section 201 is reduced pursuant to Section 201.5 of this Act,
4the Department shall not make the deposits required by this
5subsection (g) on or after the effective date of the reduction.
6 (h) Deposits into the Tax Compliance and Administration
7Fund. Beginning on the first day of the first calendar month to
8occur on or after August 26, 2014 (the effective date of Public
9Act 98-1098), each month the Department shall pay into the Tax
10Compliance and Administration Fund, to be used, subject to
11appropriation, to fund additional auditors and compliance
12personnel at the Department, an amount equal to 1/12 of 5% of
13the cash receipts collected during the preceding fiscal year by
14the Audit Bureau of the Department from the tax imposed by
15subsections (a), (b), (c), and (d) of Section 201 of this Act,
16net of deposits into the Income Tax Refund Fund made from those
17cash receipts.
18 (i) Deposits into the Individual Income Tax Bond Fund.
19Beginning on the first day of the calendar month succeeding the
20date of issuance of the initial series of Bonds under the
21Individual Income Tax Bond Act, the Department shall deposit
2260% of the net of the amounts collected from the imposition of
23the tax on individuals pursuant to subsections (a) and (b) of
24Section 201 of this Act remaining after deposits or transfers
25into (i) the Local Government Distributive Fund pursuant to
26subsection (b) of this Section, (ii) the Income Tax Refund Fund

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1pursuant to subsection (c) of this Section, (iii) the Education
2Assistance Fund and the Income Tax Surcharge Local Government
3Distributive Fund pursuant to subsection (e) of this Section,
4(iv) the Fund for the Advancement of Education pursuant to
5subsection (f) of this Section, and (v) the Commitment to Human
6Services Fund pursuant to subsection (g) of this Section.
7(Source: P.A. 98-24, eff. 6-19-13; 98-674, eff. 6-30-14;
898-1052, eff. 8-26-14; 98-1098, eff. 8-26-14; 99-78, eff.
97-20-15.)
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