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90_HB1640
35 ILCS 200/18-185
105 ILCS 5/34A-501.2 new
105 ILCS 5/34A-502 from Ch. 122, par. 34A-502
Amends the School Code and the Property Tax Code.
Authorizes the Chicago School Finance Authority to incur
indebtedness by the issuance of bonds for constructing new
and rehabilitating existing school buildings in an aggregate
additional principal amount outstanding at any time not
exceeding $1.2 billion. Defines the Authority's "debt
service extension base" (as used in the Property Tax
Extension Limitation Law relative to a source from which
limited bonds may be made payable) to mean an amount equal to
the portion of the 1994 taxes that were levied by the
Authority to pay debt service on bonds issued by the
Authority and that had not yet been abated as a result of the
refunding of those bonds, without regard to subsequent
additional abatements by the Authority of that tax levy.
Effective immediately.
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1 AN ACT relating to the affairs of school districts,
2 amending named Acts.
3 Be it enacted by the People of the State of Illinois,
4 represented in the General Assembly:
5 Section 5. The Property Tax Code is amended by changing
6 Section 18-185 as follows:
7 (35 ILCS 200/18-185)
8 Sec. 18-185. Short title; definitions. This Section and
9 Sections 18-190 through 18-245 may be cited as the Property
10 Tax Extension Limitation Law. As used in Sections 18-190
11 through 18-245:
12 "Consumer Price Index" means the Consumer Price Index for
13 All Urban Consumers for all items published by the United
14 States Department of Labor.
15 "Extension limitation" means (a) the lesser of 5% or the
16 percentage increase in the Consumer Price Index during the
17 12-month calendar year preceding the levy year or (b) the
18 rate of increase approved by voters under Section 18-205.
19 "Affected county" means a county of 3,000,000 or more
20 inhabitants or a county contiguous to a county of 3,000,000
21 or more inhabitants.
22 "Taxing district" has the same meaning provided in
23 Section 1-150, except as otherwise provided in this Section.
24 For the 1991 through 1994 levy years only, "taxing district"
25 includes only each non-home rule taxing district having the
26 majority of its 1990 equalized assessed value within any
27 county or counties contiguous to a county with 3,000,000 or
28 more inhabitants. Beginning with the 1995 levy year, "taxing
29 district" includes only each non-home rule taxing district
30 subject to this Law before the 1995 levy year and each
31 non-home rule taxing district not subject to this Law before
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1 the 1995 levy year having the majority of its 1994 equalized
2 assessed value in an affected county or counties. Beginning
3 with the levy year in which this Law becomes applicable to a
4 taxing district as provided in Section 18-213, "taxing
5 district" also includes those taxing districts made subject
6 to this Law as provided in Section 18-213.
7 "Aggregate extension" for taxing districts to which this
8 Law applied before the 1995 levy year means the annual
9 corporate extension for the taxing district and those special
10 purpose extensions that are made annually for the taxing
11 district, excluding special purpose extensions: (a) made for
12 the taxing district to pay interest or principal on general
13 obligation bonds that were approved by referendum; (b) made
14 for any taxing district to pay interest or principal on
15 general obligation bonds issued before October 1, 1991; (c)
16 made for any taxing district to pay interest or principal on
17 bonds issued to refund or continue to refund those bonds
18 issued before October 1, 1991; (d) made for any taxing
19 district to pay interest or principal on bonds issued to
20 refund or continue to refund bonds issued after October 1,
21 1991 that were approved by referendum; (e) made for any
22 taxing district to pay interest or principal on revenue bonds
23 issued before October 1, 1991 for payment of which a property
24 tax levy or the full faith and credit of the unit of local
25 government is pledged; however, a tax for the payment of
26 interest or principal on those bonds shall be made only after
27 the governing body of the unit of local government finds that
28 all other sources for payment are insufficient to make those
29 payments; (f) made for payments under a building commission
30 lease when the lease payments are for the retirement of bonds
31 issued by the commission before October 1, 1991, to pay for
32 the building project; (g) made for payments due under
33 installment contracts entered into before October 1, 1991;
34 (h) made for payments of principal and interest on bonds
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1 issued under the Metropolitan Water Reclamation District Act
2 to finance construction projects initiated before October 1,
3 1991; (i) made for payments of principal and interest on
4 limited bonds, as defined in Section 3 of the Local
5 Government Debt Reform Act, in an amount not to exceed the
6 debt service extension base less the amount in items (b),
7 (c), (e), and (h) of this definition for non-referendum
8 obligations, except obligations initially issued pursuant to
9 referendum; and (j) made for payments of principal and
10 interest on bonds issued under Section 15 of the Local
11 Government Debt Reform Act.
12 "Aggregate extension" for the taxing districts to which
13 this Law did not apply before the 1995 levy year (except
14 taxing districts subject to this Law in accordance with
15 Section 18-213) means the annual corporate extension for the
16 taxing district and those special purpose extensions that are
17 made annually for the taxing district, excluding special
18 purpose extensions: (a) made for the taxing district to pay
19 interest or principal on general obligation bonds that were
20 approved by referendum; (b) made for any taxing district to
21 pay interest or principal on general obligation bonds issued
22 before March 1, 1995; (c) made for any taxing district to pay
23 interest or principal on bonds issued to refund or continue
24 to refund those bonds issued before March 1, 1995; (d) made
25 for any taxing district to pay interest or principal on bonds
26 issued to refund or continue to refund bonds issued after
27 March 1, 1995 that were approved by referendum; (e) made for
28 any taxing district to pay interest or principal on revenue
29 bonds issued before March 1, 1995 for payment of which a
30 property tax levy or the full faith and credit of the unit of
31 local government is pledged; however, a tax for the payment
32 of interest or principal on those bonds shall be made only
33 after the governing body of the unit of local government
34 finds that all other sources for payment are insufficient to
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1 make those payments; (f) made for payments under a building
2 commission lease when the lease payments are for the
3 retirement of bonds issued by the commission before March 1,
4 1995 to pay for the building project; (g) made for payments
5 due under installment contracts entered into before March 1,
6 1995; (h) made for payments of principal and interest on
7 bonds issued under the Metropolitan Water Reclamation
8 District Act to finance construction projects initiated
9 before October 1, 1991; (i) made for payments of principal
10 and interest on limited bonds, as defined in Section 3 of the
11 Local Government Debt Reform Act, in an amount not to exceed
12 the debt service extension base less the amount in items (b),
13 (c), (e), and (h) of this definition for non-referendum
14 obligations, except obligations initially issued pursuant to
15 referendum; (j) made for payments of principal and interest
16 on bonds issued under Section 15 of the Local Government Debt
17 Reform Act; (k) made for payments of principal and interest
18 on bonds authorized by Public Act 88-503 and issued under
19 Section 20a of the Chicago Park District Act for aquarium or
20 museum projects; and (l) made for payments of principal and
21 interest on bonds authorized by Public Act 87-1191 and issued
22 under Section 42 of the Cook County Forest Preserve District
23 Act for zoological park projects.
24 "Aggregate extension" for all taxing districts to which
25 this Law applies in accordance with Section 18-213 means the
26 annual corporate extension for the taxing district and those
27 special purpose extensions that are made annually for the
28 taxing district, excluding special purpose extensions: (a)
29 made for the taxing district to pay interest or principal on
30 general obligation bonds that were approved by referendum;
31 (b) made for any taxing district to pay interest or principal
32 on general obligation bonds issued before the date on which
33 the referendum making this Law applicable to the taxing
34 district is held; (c) made for any taxing district to pay
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1 interest or principal on bonds issued to refund or continue
2 to refund those bonds issued before the date on which the
3 referendum making this Law applicable to the taxing district
4 is held; (d) made for any taxing district to pay interest or
5 principal on bonds issued to refund or continue to refund
6 bonds issued after the date on which the referendum making
7 this Law applicable to the taxing district is held if the
8 bonds were approved by referendum after the date on which the
9 referendum making this Law applicable to the taxing district
10 is held; (e) made for any taxing district to pay interest or
11 principal on revenue bonds issued before the date on which
12 the referendum making this Law applicable to the taxing
13 district is held for payment of which a property tax levy or
14 the full faith and credit of the unit of local government is
15 pledged; however, a tax for the payment of interest or
16 principal on those bonds shall be made only after the
17 governing body of the unit of local government finds that all
18 other sources for payment are insufficient to make those
19 payments; (f) made for payments under a building commission
20 lease when the lease payments are for the retirement of bonds
21 issued by the commission before the date on which the
22 referendum making this Law applicable to the taxing district
23 is held to pay for the building project; (g) made for
24 payments due under installment contracts entered into before
25 the date on which the referendum making this Law applicable
26 to the taxing district is held; (h) made for payments of
27 principal and interest on limited bonds, as defined in
28 Section 3 of the Local Government Debt Reform Act, in an
29 amount not to exceed the debt service extension base less the
30 amount in items (b), (c), and (e) of this definition for
31 non-referendum obligations, except obligations initially
32 issued pursuant to referendum; (i) made for payments of
33 principal and interest on bonds issued under Section 15 of
34 the Local Government Debt Reform Act; and (j) made for a
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1 qualified airport authority to pay interest or principal on
2 general obligation bonds issued for the purpose of paying
3 obligations due under, or financing airport facilities
4 required to be acquired, constructed, installed or equipped
5 pursuant to, contracts entered into before March 1, 1996 (but
6 not including any amendments to such a contract taking effect
7 on or after that date).
8 "Debt service extension base" means an amount equal to
9 that portion of the extension for a taxing district for the
10 1994 levy year, or for those taxing districts subject to this
11 Law in accordance with Section 18-213 for the levy year in
12 which the referendum making this Law applicable to the taxing
13 district is held, constituting an extension for payment of
14 principal and interest on bonds issued by the taxing district
15 without referendum, but not including (i) bonds authorized by
16 Public Act 88-503 and issued under Section 20a of the Chicago
17 Park District Act for aquarium and museum projects; (ii)
18 bonds issued under Section 15 of the Local Government Debt
19 Reform Act; or (iii) refunding obligations issued to refund
20 or to continue to refund obligations initially issued
21 pursuant to referendum. However, with respect to a School
22 Finance Authority established pursuant to Article 34A of the
23 School Code, "debt service extension base" shall mean an
24 amount equal to that portion of the taxes levied by such
25 Authority for the 1994 levy year for the payment of principal
26 and interest on bonds issued by such Authority that had not
27 been abated as a result of the refunding of such bonds,
28 without regard to subsequent additional abatements by such
29 Authority of such levy of taxes. The debt service extension
30 base may be established or increased as provided under
31 Section 18-212.
32 "Special purpose extensions" include, but are not limited
33 to, extensions for levies made on an annual basis for
34 unemployment and workers' compensation, self-insurance,
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1 contributions to pension plans, and extensions made pursuant
2 to Section 6-601 of the Illinois Highway Code for a road
3 district's permanent road fund whether levied annually or
4 not. The extension for a special service area is not
5 included in the aggregate extension.
6 "Aggregate extension base" means the taxing district's
7 last preceding aggregate extension as adjusted under Sections
8 18-215 through 18-230.
9 "Levy year" has the same meaning as "year" under Section
10 1-155.
11 "New property" means (i) the assessed value, after final
12 board of review or board of appeals action, of new
13 improvements or additions to existing improvements on any
14 parcel of real property that increase the assessed value of
15 that real property during the levy year multiplied by the
16 equalization factor issued by the Department under Section
17 17-30 and (ii) the assessed value, after final board of
18 review or board of appeals action, of real property not
19 exempt from real estate taxation, which real property was
20 exempt from real estate taxation for any portion of the
21 immediately preceding levy year, multiplied by the
22 equalization factor issued by the Department under Section
23 17-30.
24 "Qualified airport authority" means an airport authority
25 organized under the Airport Authorities Act and located in a
26 county bordering on the State of Wisconsin and having a
27 population in excess of 200,000 and not greater than 500,000.
28 "Recovered tax increment value" means the amount of the
29 current year's equalized assessed value, in the first year
30 after a municipality terminates the designation of an area as
31 a redevelopment project area previously established under the
32 Tax Increment Allocation Development Act in the Illinois
33 Municipal Code, previously established under the Industrial
34 Jobs Recovery Law in the Illinois Municipal Code, or
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1 previously established under the Economic Development Area
2 Tax Increment Allocation Act, of each taxable lot, block,
3 tract, or parcel of real property in the redevelopment
4 project area over and above the initial equalized assessed
5 value of each property in the redevelopment project area.
6 Except as otherwise provided in this Section, "limiting
7 rate" means a fraction the numerator of which is the last
8 preceding aggregate extension base times an amount equal to
9 one plus the extension limitation defined in this Section and
10 the denominator of which is the current year's equalized
11 assessed value of all real property in the territory under
12 the jurisdiction of the taxing district during the prior levy
13 year. For those taxing districts that reduced their
14 aggregate extension for the last preceding levy year, the
15 highest aggregate extension in any of the last 3 preceding
16 levy years shall be used for the purpose of computing the
17 limiting rate. The denominator shall not include new
18 property. The denominator shall not include the recovered
19 tax increment value.
20 (Source: P.A. 88-455; 89-1, eff. 2-12-95; 89-138, eff.
21 7-14-95; 89-385, eff. 8-18-95; 89-436, eff. 1-1-96; 89-449,
22 eff. 6-1-96; 89-510, eff. 7-11-96.)
23 Section 10. The School Code is amended by changing
24 Section 34A-502 and adding Section 34A-501.2 as follows:
25 (105 ILCS 5/34A-501.2 new)
26 Sec. 34A-501.2. Authority to issue Bonds for
27 construction and rehabilitation.
28 (a) In addition to the authority granted by Section
29 34A-501 of this Article, the Authority may incur indebtedness
30 by the issuance of its Bonds (as defined in subsection (a) of
31 Section 34A-501) in an aggregate additional principal amount
32 outstanding at any time not to exceed the sum of
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1 $1,200,000,000 (provided that Bonds may be issued in excess
2 of such limitation to refund outstanding Bonds issued under
3 this Section) for the purpose of providing the Board with
4 moneys for constructing new school buildings and
5 rehabilitating existing school buildings, including, without
6 limitation, all necessary site acquisition and repairing,
7 modernizing, providing additions to and facilities in,
8 altering, reconstructing, and acquiring school buildings and
9 equipment. Bonds issued pursuant to this authorization may
10 be issued in excess of any statutory limitation as to debt
11 applicable to the Authority or the Board and may be issued
12 without referendum.
13 (b) In order to provide additional security for Bonds
14 issued by the Authority pursuant to this Section, the Board
15 may pledge as such additional security any moneys paid to, or
16 to be paid to, or held by the Board in any of its funds that
17 are not legally or contractually prohibited from being
18 applied to such purpose. Any such pledge made by the Board
19 shall be valid and binding from the time such pledge is made.
20 The moneys and other funds so pledged and thereafter received
21 by the Board shall immediately be subject to the lien of such
22 pledge without any physical delivery thereof or further act;
23 and, subject only to the provisions of prior agreements, the
24 lien of such pledge shall be valid and binding as against all
25 parties having claims of any kind in tort, contract, or
26 otherwise against the Board, irrespective of whether such
27 parties have notice thereof. Pursuant to any such pledge,
28 the Board may bind itself to impose or provide for the
29 collection of rates, charges, or taxes to the fullest extent
30 permitted by applicable law. No resolution, trust agreement,
31 or other instrument by which such pledge is created need be
32 filed or recorded except in the records of the Board.
33 (c) Any taxes levied for the payment of any series of
34 Bonds issued pursuant to this Section, whether levied
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1 pursuant to Section 34A-503 of this Article or otherwise,
2 shall be for the sole benefit of the holders of such series
3 of Bonds and shall be deposited in the debt service fund
4 established in connection with the series of Bonds for the
5 payment of which the taxes were levied.
6 (d) The Authority may create and establish a debt
7 service reserve fund with respect to Bonds issued pursuant to
8 this Section as authorized by the provisions of Section
9 34A-505 of this Article.
10 (e) Any interest or other investment earnings on
11 proceeds of Bonds issued under this Section shall be applied
12 as provided in the resolution authorizing such Bonds, which
13 resolution shall require those earnings to be used for the
14 same purpose as the proceeds of those Bonds or for the
15 payment of principal of or interest or redemption premium on
16 such Bonds, either at maturity or an earlier redemption date.
17 Application by the Authority of any proceeds of Bonds issued
18 under this Section, or interest or other investment earnings
19 thereon, shall be in the sole judgment and discretion of the
20 Authority, but no such moneys shall be so provided unless the
21 Authority shall have found and determined, in its sole
22 judgment and discretion, that such moneys are to be used for
23 those purposes and not for providing the Board with moneys
24 for its ordinary and necessary expenditures for educational
25 purposes, maintenance of school facilities, or other
26 operational needs. The Authority may, in making its findings
27 and determinations, rely upon information provided by or on
28 behalf of the Board. The Authority may from time to time
29 make and amend regulations and issue directives with respect
30 to the use and application of such moneys.
31 (f) The Authority may, at any time, in its sole judgment
32 and discretion, deposit unexpended proceeds of Bonds issued
33 under this Section or interest or other investment earnings
34 thereon solely in the debt service fund established for such
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1 Bonds and shall apply such moneys to the payment of principal
2 of or interest or redemption premium on such Bonds, at
3 maturity or an earlier redemption date. In the resolution
4 authorizing Bonds being issued under this Section, the
5 Authority may make commitments or covenants to holders of
6 such Bonds with respect to such use of such unexpended
7 proceeds and interest or other investment earnings.
8 (105 ILCS 5/34A-502) (from Ch. 122, par. 34A-502)
9 Sec. 34A-502. Terms of Bonds.
10 (a) Whenever the Authority desires or is required to
11 issue Bonds as provided in this Article, it shall adopt a
12 resolution designating the amount of the Bonds to be issued,
13 the purposes for which the proceeds of the Bonds are to be
14 used and the manner in which such proceeds shall be held
15 pending the application thereof. The Bonds shall be issued
16 in the corporate name of the Authority, shall bear such date
17 or dates, and shall mature at such time or times not
18 exceeding 30 years from their date as such resolution may
19 provide; provided, however, that, except for Bonds issued
20 pursuant to subsection (b) of Section 34A-501 and Section
21 34A-501.2 of this Article, Bonds issued on or after July 1,
22 1993 shall mature on or before June 1, 2009. The Bonds may
23 be issued as serial bonds payable in installments or as term
24 bonds with sinking fund installments or as a combination
25 thereof as the Authority may determine in such resolution.
26 The Bonds shall be in such denominations of $1,000 or
27 integral multiples thereof. The Bonds shall be in such form,
28 either coupon or registered, carry such registration
29 privileges, be executed in such manner, be payable at such
30 place or places and be subject to such terms of redemption at
31 such redemption prices, including premium, as such resolution
32 may provide. The Bonds shall be sold by the Authority at
33 public sale. The Bonds shall be sold to the highest and best
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1 bidders upon sealed bids. The Authority shall, from time to
2 time as Bonds are to be sold, advertise in at least 2 daily
3 newspapers, one of which is published in the City of
4 Springfield and one in the City of Chicago, for proposals to
5 purchase Bonds. Each of such advertisements for proposals
6 shall be published at least ten days prior to the date of the
7 opening of the bids. The Authority may reserve the right to
8 reject any and all bids.
9 (b) Bonds issued prior to December 31, 1980 shall bear
10 interest at such rate or rates and at such price or prices as
11 the Authority may approve in the resolution authorizing the
12 issuance of Bonds. Bonds issued after December 31, 1980
13 shall bear interest at a rate or rates not to exceed the
14 maximum annual rate provided for in Section 2 of "An Act to
15 authorize public corporations to issue bonds, other evidences
16 of indebtedness and tax anticipation warrants subject to
17 interest rate limitations set forth therein", approved May
18 26, 1970, as amended, and if issued at such maximum annual
19 rate shall be sold for not less than par and accrued
20 interest. If any of the Bonds are issued to bear interest at
21 a rate of less than such maximum annual rate the minimum
22 price at which they may be sold shall be such that the
23 interest cost to the Authority on the proceeds of the Bonds
24 shall not exceed such maximum annual rate computed to stated
25 maturity according to standard tables of bond values.
26 (c) In connection with the issuance of its Bonds, the
27 Authority may enter into arrangements to provide additional
28 security and liquidity for the Bonds. These may include,
29 without limitation, municipal bond insurance, letters of
30 credit, lines of credit by which the Authority may borrow
31 funds to pay or redeem its Bonds and purchase or remarketing
32 arrangements for assuring the ability of owners of the
33 Authority's Bonds to sell or to have redeemed their Bonds.
34 The Authority may enter into contracts and may agree to pay
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1 fees to persons providing such arrangements, including from
2 Bond proceeds but only under circumstances in which the total
3 interest paid or to be paid on the Bonds, together with the
4 fees for the arrangements (being treated as if interest),
5 would not, taken together, cause the Bonds to bear interest,
6 calculated to their absolute maturity, at a rate in excess of
7 the maximum rate allowed by law.
8 The resolution of the Authority authorizing the issuance
9 of its Bonds may provide that interest rates may vary from
10 time to time depending upon criteria established by the
11 Authority, which may include, without limitation, a variation
12 in interest rates as may be necessary to cause Bonds to be
13 remarketable from time to time at a price equal to their
14 principal amount, and may provide for appointment of a
15 national banking association, bank, trust company, investment
16 banker or other financial institution to serve as a
17 remarketing agent in that connection. The resolution of the
18 Authority authorizing the issuance of its Bonds may provide
19 that alternative interest rates or provisions will apply
20 during such times as the Bonds are held by a person providing
21 a letter of credit or other credit enhancement arrangement
22 for those Bonds.
23 (d) With respect to instruments for the payment of money
24 issued under this Article, it is the intention of the General
25 Assembly (i) that the Omnibus Bond Acts are supplementary
26 grants of power to issue instruments in accordance with the
27 Omnibus Bond Acts, regardless of any provision of this
28 Article that may appear to be more restrictive than those
29 Acts, (ii) that the provisions of this Section are not a
30 limitation on the supplementary authority granted by the
31 Omnibus Bond Acts, and (iii) that instruments issued under
32 this Section within the supplementary authority granted by
33 the Omnibus Bond Acts are not invalid because of any
34 provision of this Act that may appear to be more restrictive
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1 than those Acts.
2 (Source: P.A. 88-511.)
3 Section 99. Effective date. This Act takes effect upon
4 becoming a law.