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| | HB2584 Engrossed | | LRB100 10569 MLM 20786 b |
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| 1 | | AN ACT concerning finance.
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| 2 | | Be it enacted by the People of the State of Illinois,
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| 3 | | represented in the General Assembly:
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| 4 | | Section 5. The Local Government Debt Reform Act is amended |
| 5 | | by adding Section 13.1 as follows:
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| 6 | | (30 ILCS 350/13.1 new) |
| 7 | | Sec. 13.1. Statutory lien for bonds. |
| 8 | | (a) As used in this Section, "statutory lien" shall have |
| 9 | | the meaning given to that term under 11 U.S.C. 101(53) of the |
| 10 | | federal Bankruptcy Code. |
| 11 | | (b) All bonds, including general obligation bonds and |
| 12 | | revenue bonds heretofore and hereafter issued and sold under |
| 13 | | this Act, home rule powers, or related laws, issued by a local |
| 14 | | public entity shall be secured by a statutory lien on all |
| 15 | | revenues received, or entitled to be received, pursuant to (i) |
| 16 | | the levy of taxes supporting payment of the bonds and (ii) the |
| 17 | | assessment of user fees, rates, or other charges supporting |
| 18 | | payment of the bonds. The statutory lien shall automatically |
| 19 | | attach from the time the bonds are issued without further |
| 20 | | action or authorization by the governing authority of the local |
| 21 | | public entity. The statutory lien shall be valid and binding |
| 22 | | from the time the bonds are executed and delivered without any |
| 23 | | physical delivery thereof or further act required, and shall be |
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| | HB2584 Engrossed | - 2 - | LRB100 10569 MLM 20786 b |
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| 1 | | a first priority lien unless the bonds shall otherwise provide, |
| 2 | | and the taxes, user fees, rates, or other charges supporting |
| 3 | | payment of the bonds shall not be used for other purposes until |
| 4 | | the bonds are paid in full unless the bonds shall otherwise |
| 5 | | provide. |
| 6 | | The revenues received, or entitled to be received, from the |
| 7 | | following shall be immediately subject to the statutory lien, |
| 8 | | and the statutory lien shall automatically attach to the |
| 9 | | revenues and be effective, binding, and enforceable against the |
| 10 | | local public entity or its successors, transferees, and |
| 11 | | creditors, and all others asserting rights therein or having |
| 12 | | claims of any kind in tort, contract, or otherwise against the |
| 13 | | local public entity, irrespective of whether those parties have |
| 14 | | notice of the lien and without the need for any physical |
| 15 | | delivery, recordation, filing, or further act: (i) the levy of |
| 16 | | taxes supporting payment of the bonds and (ii) the assessment |
| 17 | | of user fees, rates, or other charges supporting payment of the |
| 18 | | bonds. In addition, bonds issued by a local public entity under |
| 19 | | this Act or related laws, including bonds issued by a local |
| 20 | | public entity with home rule powers, shall have all of the |
| 21 | | protection afforded to special revenue bonds under the federal |
| 22 | | Bankruptcy Code.
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| 23 | | Section 99. Effective date. This Act takes effect upon |
| 24 | | becoming law.
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