Sen. Don Harmon
Filed: 3/4/2004
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1 | AMENDMENT TO HOUSE BILL 2626
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2 | AMENDMENT NO. ______. Amend House Bill 2626 by replacing | ||||||
3 | everything after the enacting clause with the following: | ||||||
4 | "Section 5. The General Obligation Bond Act is amended by | ||||||
5 | changing Section 9 as follows:
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6 | (30 ILCS 330/9) (from Ch. 127, par. 659)
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7 | Sec. 9. Conditions for Issuance and Sale of Bonds - | ||||||
8 | Requirements for
Bonds.
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9 | (a) Bonds shall be issued and sold from time to time, in | ||||||
10 | one or
more series, in such amounts and at such prices as may | ||||||
11 | be directed by the
Governor, upon recommendation by the | ||||||
12 | Director of the
Governor's Office of Management and Budget
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13 | Bureau of the Budget .
Bonds shall be in such form (either | ||||||
14 | coupon, registered or book entry), in
such denominations, | ||||||
15 | payable within 30 years from their date, subject to such
terms | ||||||
16 | of redemption with or without premium, bear interest payable at
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17 | such times and at such fixed or variable rate or rates, and be | ||||||
18 | dated
as shall be fixed and determined by the Director of
the
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19 | Governor's Office of Management and Budget
Bureau of the Budget
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20 | in the order authorizing the issuance and sale
of any series of | ||||||
21 | Bonds, which order shall be approved by the Governor
and is | ||||||
22 | herein called a "Bond Sale Order"; provided however, that | ||||||
23 | interest
payable at fixed or variable rates shall not exceed | ||||||
24 | that permitted in the
Bond Authorization Act, as now or |
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1 | hereafter amended. Bonds shall be
payable at such place or | ||||||
2 | places, within or without the State of Illinois, and
may be | ||||||
3 | made registrable as to either principal or as to both principal | ||||||
4 | and
interest, as shall be specified in the Bond Sale Order. | ||||||
5 | Bonds may be callable
or subject to purchase and retirement or | ||||||
6 | tender and remarketing as fixed
and determined in the Bond Sale | ||||||
7 | Order.
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8 | In the case of any series of Bonds bearing interest at a | ||||||
9 | variable interest
rate ("Variable Rate Bonds"), in lieu of | ||||||
10 | determining the rate or rates at which
such series of Variable | ||||||
11 | Rate Bonds shall bear interest and the price or prices
at which | ||||||
12 | such Variable Rate Bonds shall be initially sold or remarketed | ||||||
13 | (in the
event of purchase and subsequent resale), the Bond Sale | ||||||
14 | Order may provide that
such interest rates and prices may vary | ||||||
15 | from time to time depending on criteria
established in such | ||||||
16 | Bond Sale Order, which criteria may include, without
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17 | limitation, references to indices or variations in interest | ||||||
18 | rates as may, in
the judgment of a remarketing agent, be | ||||||
19 | necessary to cause Variable Rate Bonds
of such series to be | ||||||
20 | remarketable from time to time at a price equal to their
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21 | principal amount, and may provide for appointment of a bank, | ||||||
22 | trust company,
investment bank, or other financial institution | ||||||
23 | to serve as remarketing agent
in that connection.
The Bond Sale | ||||||
24 | Order may provide that alternative interest rates or provisions
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25 | for establishing alternative interest rates, different | ||||||
26 | security or claim
priorities, or different call or amortization | ||||||
27 | provisions will apply during
such times as Variable Rate Bonds | ||||||
28 | of any series are held by a person providing
credit or | ||||||
29 | liquidity enhancement arrangements for such Bonds as | ||||||
30 | authorized in
subsection (b) of this Section.
The Bond Sale | ||||||
31 | Order may also provide for such variable interest rates to be
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32 | established pursuant to a process generally known as an auction | ||||||
33 | rate process
and may provide for appointment of one or more | ||||||
34 | financial institutions to serve
as auction agents and |
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1 | broker-dealers in connection with the establishment of
such | ||||||
2 | interest rates and the sale and remarketing of such Bonds.
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3 | (b) In connection with the issuance of any series of Bonds, | ||||||
4 | the State may
enter into arrangements to provide additional | ||||||
5 | security and liquidity for such
Bonds, including, without | ||||||
6 | limitation, bond or interest rate insurance or
letters of | ||||||
7 | credit, lines of credit, bond purchase contracts, or other
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8 | arrangements whereby funds are made available to retire or | ||||||
9 | purchase Bonds,
thereby assuring the ability of owners of the | ||||||
10 | Bonds to sell or redeem their
Bonds. The State may enter into | ||||||
11 | contracts and may agree to pay fees to persons
providing such | ||||||
12 | arrangements, but only under circumstances where the Director | ||||||
13 | of
the
Governor's Office of Management and Budget
Bureau of the | ||||||
14 | Budget certifies that he or she reasonably expects the total
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15 | interest paid or to be paid on the Bonds, together with the | ||||||
16 | fees for the
arrangements (being treated as if interest), would | ||||||
17 | not, taken together, cause
the Bonds to bear interest, | ||||||
18 | calculated to their stated maturity, at a rate in
excess of the | ||||||
19 | rate that the Bonds would bear in the absence of such
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20 | arrangements.
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21 | The State may, with respect to Bonds issued or anticipated | ||||||
22 | to be issued,
participate in and enter into arrangements with | ||||||
23 | respect to interest rate
protection or exchange agreements, | ||||||
24 | guarantees, or financial futures contracts
for the purpose of | ||||||
25 | limiting , reducing, or managing
or restricting interest rate | ||||||
26 | exposure
risk .
The authority granted under this paragraph, | ||||||
27 | however, shall not increase the principal amount of Bonds | ||||||
28 | authorized to be issued by law. The arrangements may be | ||||||
29 | executed and delivered by the Director
of the
Governor's Office | ||||||
30 | of Management and Budget
Bureau of the Budget on behalf of the | ||||||
31 | State. Net payments for such
arrangements shall constitute | ||||||
32 | interest on the Bonds and shall be paid from the
General | ||||||
33 | Obligation Bond Retirement and Interest Fund. The Director of | ||||||
34 | the
Governor's Office of Management and Budget
Bureau of the |
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1 | Budget shall at least annually certify to the Governor and
the
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2 | State Comptroller his or her estimate of the amounts of such | ||||||
3 | net payments to
be included in the calculation of interest | ||||||
4 | required to be paid by the State.
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5 | (c) Prior to the issuance of any Variable Rate Bonds | ||||||
6 | pursuant to
subsection (a), the Director of the
Governor's | ||||||
7 | Office of Management and Budget
Bureau of the Budget shall | ||||||
8 | adopt an
interest rate risk management policy providing that | ||||||
9 | the amount of the State's
variable rate exposure with respect | ||||||
10 | to Bonds shall not exceed 20%. This policy
shall remain in | ||||||
11 | effect while any Bonds are outstanding and the issuance of
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12 | Bonds
shall be subject to the terms of such policy. The terms | ||||||
13 | of this policy may be
amended from time to time by the Director | ||||||
14 | of the
Governor's Office of Management and Budget
Bureau of the | ||||||
15 | Budget but in no
event shall any amendment cause the permitted | ||||||
16 | level of the State's variable
rate exposure with respect to | ||||||
17 | Bonds to exceed 20%.
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18 | (Source: P.A. 92-16, eff. 6-28-01; 93-9, eff. 6-3-03; revised | ||||||
19 | 8-23-03.)".
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