HB2584eng 100TH GENERAL ASSEMBLY

HB2584 Engrossed LRB100 10569 MLM 20786 b

AN ACT concerning finance.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Local Government Debt Reform Act is amended by adding Section 13.1 as follows:

(30 ILCS 350/13.1 new)

Sec. 13.1. Statutory lien for bonds.

(a) As used in this Section, "statutory lien" shall have the meaning given to that term under 11 U.S.C. 101(53) of the federal Bankruptcy Code.

(b) All bonds, including general obligation bonds and revenue bonds heretofore and hereafter issued and sold under this Act, home rule powers, or related laws, issued by a local public entity shall be secured by a statutory lien on all revenues received, or entitled to be received, pursuant to (i) the levy of taxes supporting payment of the bonds and (ii) the assessment of user fees, rates, or other charges supporting payment of the bonds. The statutory lien shall automatically attach from the time the bonds are issued without further action or authorization by the governing authority of the local public entity. The statutory lien shall be valid and binding from the time the bonds are executed and delivered without any physical delivery thereof or further act required, and shall be a first priority lien unless the bonds shall otherwise provide, and the taxes, user fees, rates, or other charges supporting payment of the bonds shall not be used for other purposes until the bonds are paid in full unless the bonds shall otherwise provide.

The revenues received, or entitled to be received, from the following shall be immediately subject to the statutory lien, and the statutory lien shall automatically attach to the revenues and be effective, binding, and enforceable against the local public entity or its successors, transferees, and creditors, and all others asserting rights therein or having claims of any kind in tort, contract, or otherwise against the local public entity, irrespective of whether those parties have notice of the lien and without the need for any physical delivery, recordation, filing, or further act: (i) the levy of taxes supporting payment of the bonds and (ii) the assessment of user fees, rates, or other charges supporting payment of the bonds. In addition, bonds issued by a local public entity under this Act or related laws, including bonds issued by a local public entity with home rule powers, shall have all of the protection afforded to special revenue bonds under the federal Bankruptcy Code.

Section 99. Effective date. This Act takes effect upon becoming law.