State of Illinois
92nd General Assembly

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 1        AN ACT concerning local government.

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

 4        Section 5.  The  Local  Government  Debt  Reform  Act  is
 5    amended by changing Section 15 as follows:

 6        (30 ILCS 350/15) (from Ch. 17, par. 6915)
 7        Sec. 15.  Double-barrelled bonds.  Whenever revenue bonds
 8    have  been authorized to be issued pursuant to applicable law
 9    or whenever there exists for a governmental  unit  a  revenue
10    source,  the procedures set forth in this Section may be used
11    by a governing body.  General obligation bonds may be  issued
12    in  lieu  of  such  revenue  bonds as authorized, and general
13    obligation bonds may  be  issued  payable  from  any  revenue
14    source.   Such general obligation bonds may be referred to as
15    "alternate bonds".  Alternate bonds may be issued without any
16    referendum or backdoor referendum except as provided in  this
17    Section,  upon  the  terms provided in Section 10 of this Act
18    without reference to other provisions of law, but  only  upon
19    the  conditions  provided  in  this Section.  Alternate bonds
20    shall not be regarded as or included in  any  computation  of
21    indebtedness  for  the  purpose of any statutory provision or
22    limitation except as expressly provided in this Section.
23        Such conditions are:
24        (a)  Alternate  bonds  shall  be  issued  for  a   lawful
25    corporate  purpose.   If  issued  in  lieu  of revenue bonds,
26    alternate bonds shall be issued for the  purposes  for  which
27    such  revenue  bonds  shall  have been authorized.  If issued
28    payable from a  revenue  source  in  the  manner  hereinafter
29    provided,  which revenue source is limited in its purposes or
30    applications, then the alternate bonds shall be  issued  only
31    for  such  limited purposes or applications.  Alternate bonds
                            -2-                LRB9210169SMdv
 1    may be issued payable  from  either  enterprise  revenues  or
 2    revenue sources, or both.
 3        (b)  Alternate   bonds   shall  be  subject  to  backdoor
 4    referendum.  The provisions of Section 5 of  this  Act  shall
 5    apply   to   such  backdoor  referendum,  together  with  the
 6    provisions  hereof.   The  authorizing  ordinance  shall   be
 7    published  in  a  newspaper  of  general  circulation  in the
 8    governmental unit.  Along with or as part of the  authorizing
 9    ordinance,  there  shall  be  published  a  notice of (1) the
10    specific  number  of  voters  required  to  sign  a  petition
11    requesting that  the  issuance  of  the  alternate  bonds  be
12    submitted to referendum, (2) the time when such petition must
13    be  filed,  (3)  the  date of the prospective referendum, and
14    (4), with respect to authorizing  ordinances  adopted  on  or
15    after  January  1,  1991,  a  statement  that  identifies any
16    revenue source that will be used to pay the principal of  and
17    interest  on  the alternate bonds.  The clerk or secretary of
18    the governmental unit shall make a petition form available to
19    anyone requesting one.  If no  petition  is  filed  with  the
20    clerk  or  secretary  within 60 30 days of publication of the
21    authorizing ordinance and notice, the alternate  bonds  shall
22    be  authorized  to  be issued.  But if within this 60 30 days
23    period, a petition is filed  with  such  clerk  or  secretary
24    signed  by electors numbering the greater of (i) 2.5% 7.5% of
25    the registered voters in the governmental unit or (ii) 200 of
26    those registered voters or 15% of  those  registered  voters,
27    whichever is less, asking that the issuance of such alternate
28    bonds  be  submitted  to  referendum,  the clerk or secretary
29    shall certify such question for  submission  at  an  election
30    held  in  accordance  with  the  general  election  law.  The
31    question  on  the  ballot  shall  include  a statement of any
32    revenue source that will be used to pay the principal of  and
33    interest on the alternate bonds. The alternate bonds shall be
34    authorized  to  be  issued if a majority of the votes cast on
                            -3-                LRB9210169SMdv
 1    the question at such election are in favor  thereof  provided
 2    that  notice  of  the bond referendum, if held before July 1,
 3    1999, has been given in accordance  with  the  provisions  of
 4    Section  12-5  of  the Election Code in effect at the time of
 5    the bond referendum, at least 10 and not more  than  45  days
 6    before the date of the election, notwithstanding the time for
 7    publication   otherwise  imposed  by  Section  12-5.  Notices
 8    required  in  connection  with  the  submission   of   public
 9    questions  on  or after July 1, 1999 shall be as set forth in
10    Section  12-5  of  the  Election  Code.  Backdoor  referendum
11    proceedings for bonds and alternate bonds  to  be  issued  in
12    lieu of such bonds may be conducted at the same time.
13        (c)  To the extent payable from enterprise revenues, such
14    revenues  shall have been determined by the governing body to
15    be sufficient to provide for or pay in  each  year  to  final
16    maturity  of  such alternate bonds all of the following:  (1)
17    costs  of  operation  and  maintenance  of  the  utility   or
18    enterprise,  but not including depreciation, (2) debt service
19    on all outstanding revenue bonds payable from such enterprise
20    revenues, (3) all  amounts  required  to  meet  any  fund  or
21    account requirements with respect to such outstanding revenue
22    bonds,  (4)  other contractual or tort liability obligations,
23    if any, payable from such enterprise  revenues,  and  (5)  in
24    each year, an amount not less than 1.25 times debt service of
25    all (i) alternate bonds payable from such enterprise revenues
26    previously  issued  and  outstanding and (ii) alternate bonds
27    proposed to be issued.  To the extent  payable  from  one  or
28    more revenue sources, such sources shall have been determined
29    by  the governing body to provide in each year, an amount not
30    less than 1.25 times debt  service  of  all  alternate  bonds
31    payable  from  such  revenue  sources  previously  issued and
32    outstanding and alternate bonds proposed to be  issued.   The
33    conditions  enumerated in this subsection (c) need not be met
34    for that amount of debt service provided for by  the  setting
                            -4-                LRB9210169SMdv
 1    aside of proceeds of bonds or other moneys at the time of the
 2    delivery of such bonds.
 3        (c-1)  In  the case of alternate bonds issued as variable
 4    rate bonds (including refunding bonds), debt service shall be
 5    projected based on the rate for the most recent date shown in
 6    the 20 G.O. Bond Index of average municipal  bond  yields  as
 7    published  in  the  most  recent  edition  of  The Bond Buyer
 8    published in New York, New York (or any successor publication
 9    or index, or if  such  publication  or  index  is  no  longer
10    published,  then  any index of long-term municipal tax-exempt
11    bond yields selected by the governmental  unit),  as  of  the
12    date  of  determination referred to in subsection (c) of this
13    Section.  Any interest or fees that may  be  payable  to  the
14    provider  of a letter of credit, line of credit, surety bond,
15    bond insurance, or other credit enhancement relating to  such
16    alternate  bonds  and  any  fees  that  may be payable to any
17    remarketing agent need not be taken into account for purposes
18    of such projection.  If the governmental unit enters into  an
19    agreement in connection with such alternate bonds at the time
20    of  issuance  thereof pursuant to which the governmental unit
21    agrees for a specified  period  of  time  to  pay  an  amount
22    calculated  at  an  agreed-upon  rate  or  index  based  on a
23    notional amount  and  the  other  party  agrees  to  pay  the
24    governmental unit an amount calculated at an agreed-upon rate
25    or  index  based  on  such notional amount, interest shall be
26    projected for such specified period of time on the  basis  of
27    the agreed-upon rate payable by the governmental unit.
28        (d)  The  determination  of the sufficiency of enterprise
29    revenues  or  a  revenue  source,  as  applicable,  shall  be
30    supported by reference  to  the  most  recent  audit  of  the
31    governmental  unit,  which  shall be for a fiscal year ending
32    not earlier than 18 months previous to the time  of  issuance
33    of  the  alternate  bonds.  If such audit does not adequately
34    show  such  enterprise  revenues  or   revenue   source,   as
                            -5-                LRB9210169SMdv
 1    applicable, or if such enterprise revenues or revenue source,
 2    as  applicable,  are  shown  to  be  insufficient,  then  the
 3    determination of sufficiency shall be supported by the report
 4    of  an  independent  accountant  or  feasibility analyst, the
 5    latter having a national reputation  for  expertise  in  such
 6    matters,  demonstrating  the sufficiency of such revenues and
 7    explaining, if appropriate, by what means the  revenues  will
 8    be  greater  than  as  shown  in  the  audit.   Whenever such
 9    sufficiency is demonstrated by reference  to  a  schedule  of
10    higher  rates  or charges for enterprise revenues or a higher
11    tax imposition for  a  revenue  source,  such  higher  rates,
12    charges  or  taxes  shall  have  been  properly imposed by an
13    ordinance adopted prior to the time of delivery of  alternate
14    bonds.   The  reference  to  and  acceptance  of  an audit or
15    report, as the case may be,  and  the  determination  of  the
16    governing  body as to sufficiency of enterprise revenues or a
17    revenue  source  shall  be  conclusive  evidence   that   the
18    conditions  of  this  Section  have  been  met  and  that the
19    alternate bonds are valid.
20        (e)  The  enterprise  revenues  or  revenue  source,   as
21    applicable,  shall  be  in fact pledged to the payment of the
22    alternate bonds; and the governing body  shall  covenant,  to
23    the  extent it is empowered to do so, to provide for, collect
24    and apply such enterprise  revenues  or  revenue  source,  as
25    applicable,  to  the  payment  of the alternate bonds and the
26    provision of not less  than  an  additional  .25  times  debt
27    service.   The  pledge  and establishment of rates or charges
28    for enterprise revenues, or the  imposition  of  taxes  in  a
29    given  rate  or  amount,  as  provided  in  this  Section for
30    alternate bonds, shall constitute a continuing obligation  of
31    the  governmental  unit with respect to such establishment or
32    imposition and a  continuing  appropriation  of  the  amounts
33    received.   All covenants relating to alternate bonds and the
34    conditions  and  obligations  imposed  by  this  Section  are
                            -6-                LRB9210169SMdv
 1    enforceable by any bondholder of  alternate  bonds  affected,
 2    any  taxpayer of the governmental unit, and the People of the
 3    State of Illinois acting through the Attorney General or  any
 4    designee, and in the event that any such action results in an
 5    order finding that the governmental unit has not properly set
 6    rates  or  charges  or  imposed  taxes  to  the  extent it is
 7    empowered to  do  so  or  collected  and  applied  enterprise
 8    revenues or any revenue source, as applicable, as required by
 9    this  Act,  the plaintiff in any such action shall be awarded
10    reasonable  attorney's  fees.   The  intent  is   that   such
11    enterprise  revenues  or revenue source, as applicable, shall
12    be sufficient and shall be applied to  the  payment  of  debt
13    service  on  such  alternate  bonds so that taxes need not be
14    levied, or if levied need not be extended, for such  payment.
15    Nothing  in  this  Section  shall  inhibit  or  restrict  the
16    authority  of a governing body to determine the lien priority
17    of any bonds, including alternate bonds, which may be  issued
18    with respect to any enterprise revenues or revenue source.
19        In  the event that alternate bonds shall have been issued
20    and taxes, other than a designated revenue source, shall have
21    been extended pursuant to the general obligation, full  faith
22    and  credit promise supporting such alternate bonds, then the
23    amount of such alternate  bonds  then  outstanding  shall  be
24    included   in   the   computation   of  indebtedness  of  the
25    governmental unit for purposes of all statutory provisions or
26    limitations until such time as an audit of  the  governmental
27    unit  shall show that the alternate bonds have been paid from
28    the enterprise revenues or  revenue  source,  as  applicable,
29    pledged thereto for a complete fiscal year.
30        Alternate bonds may be issued to refund or advance refund
31    alternate  bonds  without  meeting  any of the conditions set
32    forth in this Section, except that the term of the  refunding
33    bonds shall not be longer than the term of the refunded bonds
34    and  that  the  debt  service  payable  in  any  year  on the
                            -7-                LRB9210169SMdv
 1    refunding bonds shall not exceed the debt service payable  in
 2    such year on the refunded bonds.
 3        Once  issued, alternate bonds shall be and forever remain
 4    until  paid  or  defeased  the  general  obligation  of   the
 5    governmental  unit,  for  the payment of which its full faith
 6    and credit are pledged, and shall be payable from the levy of
 7    taxes as is provided  in  this  Act  for  general  obligation
 8    bonds.
 9        The  changes  made  by this amendatory Act of 1990 do not
10    affect the validity of bonds authorized before  September  1,
11    1990.
12    (Source:  P.A.  90-812,  eff.  1-26-99;  91-57, eff. 6-30-99;
13    91-493, eff. 8-13-99; 91-868, eff. 6-22-00.)

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