Public Act 093-0666
 
HB2626 Enrolled LRB093 08783 RCE 09014 b

    AN ACT concerning bonds.
 
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
 
    Section 5. The General Obligation Bond Act is amended by
changing Section 9 as follows:
 
    (30 ILCS 330/9)  (from Ch. 127, par. 659)
    Sec. 9. Conditions for Issuance and Sale of Bonds -
Requirements for Bonds.
    (a) Bonds shall be issued and sold from time to time, in
one or more series, in such amounts and at such prices as may
be directed by the Governor, upon recommendation by the
Director of the Governor's Office of Management and Budget
Bureau of the Budget. Bonds shall be in such form (either
coupon, registered or book entry), in such denominations,
payable within 30 years from their date, subject to such terms
of redemption with or without premium, bear interest payable at
such times and at such fixed or variable rate or rates, and be
dated as shall be fixed and determined by the Director of the
Governor's Office of Management and Budget Bureau of the Budget
in the order authorizing the issuance and sale of any series of
Bonds, which order shall be approved by the Governor and is
herein called a "Bond Sale Order"; provided however, that
interest payable at fixed or variable rates shall not exceed
that permitted in the Bond Authorization Act, as now or
hereafter amended. Bonds shall be payable at such place or
places, within or without the State of Illinois, and may be
made registrable as to either principal or as to both principal
and interest, as shall be specified in the Bond Sale Order.
Bonds may be callable or subject to purchase and retirement or
tender and remarketing as fixed and determined in the Bond Sale
Order.
    In the case of any series of Bonds bearing interest at a
variable interest rate ("Variable Rate Bonds"), in lieu of
determining the rate or rates at which such series of Variable
Rate Bonds shall bear interest and the price or prices at which
such Variable Rate Bonds shall be initially sold or remarketed
(in the event of purchase and subsequent resale), the Bond Sale
Order may provide that such interest rates and prices may vary
from time to time depending on criteria established in such
Bond Sale Order, which criteria may include, without
limitation, references to indices or variations in interest
rates as may, in the judgment of a remarketing agent, be
necessary to cause Variable Rate Bonds of such series to be
remarketable from time to time at a price equal to their
principal amount, and may provide for appointment of a bank,
trust company, investment bank, or other financial institution
to serve as remarketing agent in that connection. The Bond Sale
Order may provide that alternative interest rates or provisions
for establishing alternative interest rates, different
security or claim priorities, or different call or amortization
provisions will apply during such times as Variable Rate Bonds
of any series are held by a person providing credit or
liquidity enhancement arrangements for such Bonds as
authorized in subsection (b) of this Section. The Bond Sale
Order may also provide for such variable interest rates to be
established pursuant to a process generally known as an auction
rate process and may provide for appointment of one or more
financial institutions to serve as auction agents and
broker-dealers in connection with the establishment of such
interest rates and the sale and remarketing of such Bonds.
    (b) In connection with the issuance of any series of Bonds,
the State may enter into arrangements to provide additional
security and liquidity for such Bonds, including, without
limitation, bond or interest rate insurance or letters of
credit, lines of credit, bond purchase contracts, or other
arrangements whereby funds are made available to retire or
purchase Bonds, thereby assuring the ability of owners of the
Bonds to sell or redeem their Bonds. The State may enter into
contracts and may agree to pay fees to persons providing such
arrangements, but only under circumstances where the Director
of the Governor's Office of Management and Budget Bureau of the
Budget certifies that he or she reasonably expects the total
interest paid or to be paid on the Bonds, together with the
fees for the arrangements (being treated as if interest), would
not, taken together, cause the Bonds to bear interest,
calculated to their stated maturity, at a rate in excess of the
rate that the Bonds would bear in the absence of such
arrangements.
    The State may, with respect to Bonds issued or anticipated
to be issued, participate in and enter into arrangements with
respect to interest rate protection or exchange agreements,
guarantees, or financial futures contracts for the purpose of
limiting, reducing, or managing or restricting interest rate
exposure risk. The authority granted under this paragraph,
however, shall not increase the principal amount of Bonds
authorized to be issued by law. The arrangements may be
executed and delivered by the Director of the Governor's Office
of Management and Budget Bureau of the Budget on behalf of the
State. Net payments for such arrangements shall constitute
interest on the Bonds and shall be paid from the General
Obligation Bond Retirement and Interest Fund. The Director of
the Governor's Office of Management and Budget Bureau of the
Budget shall at least annually certify to the Governor and the
State Comptroller his or her estimate of the amounts of such
net payments to be included in the calculation of interest
required to be paid by the State.
    (c) Prior to the issuance of any Variable Rate Bonds
pursuant to subsection (a), the Director of the Governor's
Office of Management and Budget Bureau of the Budget shall
adopt an interest rate risk management policy providing that
the amount of the State's variable rate exposure with respect
to Bonds shall not exceed 20%. This policy shall remain in
effect while any Bonds are outstanding and the issuance of
Bonds shall be subject to the terms of such policy. The terms
of this policy may be amended from time to time by the Director
of the Governor's Office of Management and Budget Bureau of the
Budget but in no event shall any amendment cause the permitted
level of the State's variable rate exposure with respect to
Bonds to exceed 20%.
(Source: P.A. 92-16, eff. 6-28-01; 93-9, eff. 6-3-03; revised
8-23-03.)
 
    Section 99. Effective date. This Act takes effect upon
becoming law.