[ Search ] [ PDF text ] [ Legislation ]
[ Home ] [ Back ] [ Bottom ]
| [ Introduced ] | [ Engrossed ] | [ Enrolled ] |
| [ House Amendment 002 ] | [ House Amendment 003 ] | [ Senate Amendment 001 ] |
92_SB2241ham001
LRB9216107SMcdam01
1 AMENDMENT TO SENATE BILL 2241
2 AMENDMENT NO. . Amend Senate Bill 2241 on page 1, by
3 replacing line 1 with the following:
4 "AN ACT concerning health and human services providers.";
5 and
6 on page 1, immediately below line 3, by inserting the
7 following:
8 "Section 3. The Illinois Health Facilities Authority Act
9 is amended by changing Sections 2.06, 4.06, and 11 and by
10 adding Sections 17.1, 17.2, 17.3, 17.4, 17.5, 17.6, 17.7,
11 17.8, 17.9, and 17.10 as follows:
12 (20 ILCS 3705/2.06) (from Ch. 111 1/2, par. 1102.06)
13 Sec. 2.06. Bonds. "Bonds" means bonds, notes and bond
14 anticipation notes and any other evidences of indebtedness of
15 the Authority issued under this Act, including refunding
16 bonds and bonds issued under Section 17.3.
17 (Source: P.A. 85-1173.)
18 (20 ILCS 3705/4.06) (from Ch. 111 1/2, par. 1104.06)
19 Sec. 4.06. Issuance of bonds. To issue bonds of the
20 Authority for any of its corporate purposes and in such
-2- LRB9216107SMcdam01
1 amounts as it deems necessary and to fund or refund the same
2 all as provided in this Act, and with respect to bonds issued
3 under Section 17.3, subject to the requirements of Sections
4 17.1 through 17.10.
5 (Source: P.A. 77-2635.)
6 (20 ILCS 3705/11) (from Ch. 111 1/2, par. 1111)
7 Sec. 11. Bonds; liability of State and political
8 subdivisions.
9 (a) Bonds issued under the provisions of this Act shall
10 not be deemed to constitute a debt or liability of the State
11 or of any political subdivision thereof other than the
12 Authority or a pledge of the faith and credit of the State or
13 of any such political subdivision other than the Authority,
14 but shall be payable solely from the funds herein provided
15 therefor. The issuance of bonds under the provisions of this
16 Act shall not, directly or indirectly or contingently,
17 obligate the State or any political subdivision thereof to
18 levy any form of taxation therefor or to make any
19 appropriation for their payment. Nothing in this Section
20 contained shall prevent or be construed to prevent the
21 Authority from pledging its full faith and credit or the full
22 faith and credit of a health institution to the payment of
23 bonds authorized pursuant to this Act. Nothing in this Act
24 shall be construed to authorize the Authority to create a
25 debt of the State within the meaning of the Constitution or
26 Statutes of Illinois and all bonds issued by the Authority
27 pursuant to the provisions of this Act are payable and shall
28 state that they are payable solely from the funds pledged for
29 their payment in accordance with the resolution authorizing
30 their issuance or in any trust indenture or mortgage or deed
31 of trust executed as security therefor. The State shall not
32 in any event be liable for the payment of the principal of or
33 interest on any bonds of the Authority or for the performance
-3- LRB9216107SMcdam01
1 of any pledge, mortgage, obligation or agreement of any kind
2 whatsoever which may be undertaken by the Authority. No
3 breach of any such pledge, mortgage, obligation or agreement
4 may impose any pecuniary liability upon the State or any
5 charge upon its general credit or against its taxing power.
6 (b) The provisions of subsection (a) do not apply to
7 bonds issued under Section 17.3, the nature of which are as
8 described in Section 17.6.
9 (Source: P.A. 77-2635.)
10 (20 ILCS 3705/17.1 new)
11 Sec. 17.1. Financially distressed provider refunding bond
12 program; findings and declaration of policy. The General
13 Assembly finds and declares that health care and human
14 services providers in the State of Illinois are currently
15 experiencing serious and sustained financial problems. These
16 financial problems are most severe for a group of health and
17 human services providers who receive significant amounts of
18 funding from the State of Illinois and for a group of health
19 care providers who serve a predominantly indigent patient
20 population in areas of critical need throughout the State of
21 Illinois. The financial difficulties being experienced by
22 this group of health and human services providers has been
23 significantly worsened as a result of failure by the State of
24 Illinois to provide adequate funding to support essential
25 programs and services and by the State's failure to make
26 timely payment of amounts appropriated for payment to these
27 providers. These institutions provide essential human
28 services for the people of the State of Illinois. The ability
29 of these entities effectively to carry out their mission and
30 to provide these essential services, however, is being
31 significantly hampered by these financial problems. It is
32 therefore essential that the State of Illinois provide a
33 financing mechanism to permit this group of providers to
-4- LRB9216107SMcdam01
1 refinance, at a significantly reduced rate of interest,
2 outstanding indebtedness previously issued for the purpose of
3 financing or refinancing costs of acquiring, constructing,
4 enlarging, remodeling, renovating, improving, furnishing, or
5 equipping a health facility. Use of such a financing
6 mechanism will permit these providers to realize significant
7 debt service savings, which can be applied to providing
8 expanded and improved health and human services to the
9 neediest residents of the State of Illinois. Establishing a
10 program is therefore declared to be in the public interest
11 and for the public benefit.
12 (20 ILCS 3705/17.2 new)
13 Sec. 17.2. Definitions. The following words or terms,
14 whenever used or referred to in Sections 17.1 through 17.9,
15 have the following meanings ascribed to them, except where
16 the context clearly requires otherwise:
17 (a) "Costs of issuance" means all reasonable costs
18 incurred in connection with the issuance of the bonds
19 including, but not limited to, legal and accounting fees and
20 expenses, printing expenses, financial consultants' fees,
21 financing charges (including underwriting and placement fees
22 and discounts), printing costs, costs incurred in connection
23 with public approvals, fees and expenses associated with
24 obtaining a rating on the bonds, costs for the preparation of
25 any disclosure document and other documents necessary for the
26 issuance of the bonds, and fees of trustees, paying agents,
27 and other fiduciaries.
28 (b) "Director" means Director of the Bureau of the
29 Budget.
30 (c) "Financially Distressed Provider Credit Enhancement
31 Fund" means the special fund created in the State treasury
32 under the State Finance Act.
33 (d) "Minimum required debt service savings" means net
-5- LRB9216107SMcdam01
1 present value savings, after payment of costs of issuance,
2 paid by, on behalf of, or with respect to any qualifying
3 provider of at least 3%. The amount of the costs of issuance
4 properly allocated as paid by, on behalf of, or with respect
5 to any qualifying provider shall be determined by the
6 Authority, with the written concurrence of the Director.
7 (e) "Qualifying provider" means a participating health
8 institution that is either: (i) certified as a provider under
9 the Critical Access Hospital program or (ii) demonstrates, to
10 the reasonable written satisfaction of the Director, that,
11 for its last 3 fiscal years for which audited financial
12 statements have been prepared, State funding accounted for an
13 annual average of at least 40% of its operating revenues.
14 (f) "Refinance" or "refinancing" means refunding of any
15 outstanding bonds, notes, or other indebtedness of a
16 qualifying provider, whether or not that indebtedness has
17 previously been issued to the Authority, whether or not
18 interest on that indebtedness is exempt from federal income
19 taxation, and regardless of the remaining term to maturity of
20 that indebtedness.
21 (g) "State agency" means the Department of Public Aid,
22 the Department of Public Health, the Department of Children
23 and Family Services, the Department of Human Services, and
24 any other department or agency of State government that
25 enters into contracts with health institutions under which
26 the institution is paid or reimbursed by the State for
27 providing health or human services to persons in Illinois.
28 (h) "State funding" means funds received from any State
29 agency.
30 (20 ILCS 3705/17.3 new)
31 Sec. 17.3. Issuance of bonds. On application of a
32 qualifying provider, the Authority may issue its bonds solely
33 for the purpose of enabling that qualifying provider to
-6- LRB9216107SMcdam01
1 refinance all or a portion of its outstanding indebtedness.
2 Bonds shall be issued by the Authority under this Section
3 only in accordance with the following requirements:
4 (1) Bonds shall be issued only for the purpose of
5 refinancing outstanding indebtedness of a qualifying provider
6 that was previously issued to finance or refinance the cost
7 of a health facility (but not including working capital,
8 accounts receivable, and operating expenses).
9 (2) Bonds shall be issued only if the Director, in
10 consultation with the Authority, determines that as a result
11 of the refinancing: (i) the qualifying provider will realize
12 minimum required debt service savings or (ii) the qualifying
13 provider will realize significant economic or financial
14 advantages that will enable it to more effectively provide
15 health care or other human services to the people of the
16 State of Illinois.
17 (3) The Authority may issue bonds for any individual
18 qualified provider or may issue a single bond issue for a
19 group of qualified providers. The Authority shall make that
20 determination only with the written concurrence of the
21 Director. The Authority and the Director are encouraged to
22 consider issuance of a single bond issue for a group of
23 qualified providers as a means of reducing costs of issuance
24 and providing greater net financial and economic benefits to
25 qualifying providers. Any single bond issue for a group of
26 qualified providers is subject to all requirements for bond
27 issues as established by this Act.
28 (20 ILCS 3705/17.4 new)
29 Sec. 17.4. Limitation on authorization.
30 (a) The Authority may issue bonds under Section 17.3 in
31 an aggregate principal amount not to exceed $300,000,000.
32 (b) Bonds may be issued under Section 17.3 on or before
33 June 30, 2003. No bonds may be issued under Section 17.3 on
-7- LRB9216107SMcdam01
1 or after July 1, 2003. The final maturity date of bonds
2 issued under Section 17.3 may be no later than January 1,
3 2024.
4 (c) Bonds may be issued by the Authority under Section
5 17.3 only after consultation with and upon receipt of the
6 written concurrence of the Director.
7 (d) The maximum amount of proceeds of bonds under
8 Section 17.3 to be loaned to, or otherwise made available for
9 the benefit of, any individual qualifying provider may not
10 exceed $50,000,000. For purposes of this subsection, proceeds
11 of bonds used to pay costs of issuance paid by, on behalf of,
12 or with respect to any qualifying provider shall not be
13 included. The amount of costs of issuance properly allocated
14 as paid by, on behalf of, or with respect to any qualifying
15 provider shall be determined by the Authority, with the
16 written concurrence of the Director.
17 (e) Unless specifically approved in writing by the
18 Director, costs of issuance for each issue of bonds may not
19 exceed one and one-half percent of the principal amount of
20 the proceeds of sale of each issue of bonds.
21 (f) If any bonds are to be sold by negotiated sale, the
22 Authority, in consultation with the Director, must comply
23 with the competitive request for proposal process set forth
24 in the Illinois Procurement Code and all other applicable
25 requirements of that Code.
26 (g) Before the issuance of bonds for the benefit of a
27 qualified provider, that qualified provider must enter into
28 an agreement with the Authority, the Director, and any
29 applicable State agency pursuant to which the qualified
30 provider agrees, among other matters, that if amounts are
31 withdrawn from the debt service reserve fund established
32 under Section 17.5 as a result of the failure of that
33 qualified provider to make timely repayment to the Authority
34 of bond proceeds loaned to, or otherwise made available for
-8- LRB9216107SMcdam01
1 the benefit of, that qualified provider, the State agency
2 shall be permitted to direct the payment of any money that is
3 otherwise due and payable to the qualified provider, up to
4 the maximum amount of that withdrawal from the debt service
5 reserve fund, into the Financially Distressed Provider Credit
6 Enhancement Fund.
7 (20 ILCS 3705/17.5 new)
8 Sec. 17.5. Debt service reserve funds.
9 (a) In connection with the issuance of each series of
10 bonds, the Authority must create and establish a debt service
11 reserve fund to be maintained by a trustee, separate and
12 segregated from all other funds and accounts of the
13 Authority. The Authority may, however, in consultation with
14 the Director, establish one debt service reserve fund for the
15 benefit of 2 or more series of bonds. The amounts required to
16 be on deposit in a debt service reserve fund shall be
17 determined by the Authority, in consultation with and upon
18 the written concurrence of the Director, and shall be
19 specified in the resolution or indenture securing the bonds.
20 Any reserve fund established under this Section shall be
21 initially funded from bond proceeds and other moneys lawfully
22 available to the Authority.
23 (b) If moneys are withdrawn from any debt service
24 reserve fund established under subsection (a), the trustee
25 shall immediately notify the Chairman of the Authority, who
26 shall in turn immediately notify the Director, the State
27 Comptroller, and the State Treasurer of the amount of that
28 withdrawal. Upon receipt of the notification, the State
29 Comptroller and the State Treasurer shall immediately
30 transfer from the Financially Distressed Provider Credit
31 Enhancement Fund to, or at the direction of, the Authority
32 for deposit into the debt service reserve fund the amount
33 required to restore that debt service reserve fund to the
-9- LRB9216107SMcdam01
1 level of the debt service reserve requirement specified in
2 the resolution or indenture securing the bonds.
3 (c) This Section constitutes an irrevocable and
4 continuing appropriation from the Financially Distressed
5 Provider Credit Enhancement Fund to any debt service reserve
6 fund established under subsection (a) of all amounts
7 necessary for that purpose and the irrevocable and continuing
8 authority for and direction to the State Treasurer and the
9 State Comptroller to make those transfers and deposits.
10 (20 ILCS 3705/17.6 new)
11 Sec. 17.6. Nature of bonds. All bonds issued under
12 Section 17.3 shall be limited obligations of the State of
13 Illinois payable from: (i) amounts transferred from the
14 Financially Distressed Provider Credit Enhancement Fund to
15 the debt service reserve fund established under Section 17.5
16 and (ii) amounts in any fund or account maintained pursuant
17 to any indenture or resolution securing those bonds to the
18 extent provided in the indenture or resolution. The bonds are
19 not general obligations of the State of Illinois and are not
20 secured by the full faith and credit of the State of
21 Illinois, and the holders of the bonds may not require the
22 levy or imposition of any taxes or the application of State
23 revenues, other than amounts transferred from the Financially
24 Distressed Provider Credit Enhancement Fund to the debt
25 service reserve fund established under Section 17.5, to the
26 payment of the bonds. Each bond shall describe the limited
27 nature of the State's obligation on the face of the bond.
28 (20 ILCS 3705/17.7 new)
29 Sec. 17.7. Actions to compel payment. If the State fails
30 to transfer required amounts from the Financially Distressed
31 Provider Credit Enhancement Fund to a debt service reserve
32 fund, as provided in Section 17.5, or from the Tobacco
-10- LRB9216107SMcdam01
1 Settlement Recovery Fund to the Financially Distressed
2 Provider Credit Enhancement Fund, as provided in Section
3 6z-43 of the State Finance Act, a civil action to compel that
4 transfer may be instituted in the Circuit Court of Sangamon
5 County by the holder or holders of the bonds issued under
6 Section 17.3. Delivery of a summons and a copy of the
7 complaint to the Attorney General constitutes sufficient
8 service to give the Circuit Court of Sangamon County
9 jurisdiction of the subject matter of such a suit and
10 jurisdiction over the State and its officers named as
11 defendants for the purpose of compelling the transfer.
12 (20 ILCS 3705/17.8 new)
13 Sec. 17.8. Covenants with bondholders. The State of
14 Illinois irrevocably covenants and agrees with the holders of
15 bonds issued under Section 17.3 that the State will not alter
16 or limit: (i) the basis on which transfers are required to be
17 made from the Tobacco Settlement Recovery Fund to the
18 Distressed Provider Credit Enhancement Fund, pursuant to
19 Section 6z-43 of the State Finance Act; (ii) the basis on
20 which transfers are required to be made from the Distressed
21 Provider Credit Enhancement Fund to either the debt service
22 reserve fund established under Section 17.5 or to the Tobacco
23 Settlement Recovery Fund; or (iii) the provisions of this Act
24 or the State Finance Act so as to impair, in any of the
25 foregoing respects, the obligations of contract incurred in
26 favor of the holders of bonds issued under Section 17.3. The
27 covenant and agreement set forth in this Section may be
28 included in a trust indenture, resolution, or bond issued
29 under Section 17.3.
30 (20 ILCS 3705/17.9 new)
31 Sec. 17.9. Tax exemption. The exercise of the powers
32 granted in Sections 17.1 through 17.10 are in all respects
-11- LRB9216107SMcdam01
1 for the benefit of the people of Illinois. In consideration
2 of that benefit, the bonds issued under Section 17.3 and the
3 income from those bonds are free from all taxation by the
4 State or its political subdivisions, except for estate,
5 transfer, and inheritance taxes. For purposes of Section 250
6 of the Illinois Income Tax Act, the exemption of the income
7 from bonds issued under those Sections terminates after all
8 of the bonds have been fully paid. The amount of that income
9 to be added to and then subtracted from federal adjusted
10 gross income or federal taxable income on the Illinois income
11 tax return of a taxpayer, as provided in Section 203 of the
12 Illinois Income Tax Act, in computing Illinois base income
13 shall be the interest net of any bond premium amortization.
14 (20 ILCS 3705/17.10 new)
15 Sec. 17.10. Generally applicable provisions. Except as
16 specifically provided for in Sections 17.1 through 17.9, all
17 bonds issued under Section 17.3 are subject to this Act in
18 the same manner and to the same extent as other bonds issued
19 under this Act.
20 Section 4. The State Finance Act is amended by changing
21 Section 6z-43 and by adding Sections 5.570 and 8.45 as
22 follows:
23 (30 ILCS 105/5.570 new)
24 Sec. 5.570. The Financially Distressed Provider Credit
25 Enhancement Fund.
26 (30 ILCS 105/6z-43)
27 Sec. 6z-43. Tobacco Settlement Recovery Fund.
28 (a) There is created in the State Treasury a special
29 fund to be known as the Tobacco Settlement Recovery Fund,
30 into which shall be deposited all monies paid to the State
-12- LRB9216107SMcdam01
1 pursuant to (1) the Master Settlement Agreement entered in
2 the case of People of the State of Illinois v. Philip Morris,
3 et al. (Circuit Court of Cook County, No. 96-L13146) and (2)
4 any settlement with or judgment against any tobacco product
5 manufacturer other than one participating in the Master
6 Settlement Agreement in satisfaction of any released claim as
7 defined in the Master Settlement Agreement, as well as any
8 other monies as provided by law. All earnings on Fund
9 investments shall be deposited into the Fund. Upon the
10 creation of the Fund, the State Comptroller shall order the
11 State Treasurer to transfer into the Fund any monies paid to
12 the State as described in item (1) or (2) of this Section
13 before the creation of the Fund plus any interest earned on
14 the investment of those monies. The Treasurer may invest the
15 moneys in the Fund in the same manner, in the same types of
16 investments, and subject to the same limitations provided in
17 the Illinois Pension Code for the investment of pension funds
18 other than those established under Article 3 or 4 of the
19 Code.
20 (b) As soon as may be practical after June 30, 2001,
21 upon notification from and at the direction of the Governor,
22 the State Comptroller shall direct and the State Treasurer
23 shall transfer the unencumbered balance in the Tobacco
24 Settlement Recovery Fund as of June 30, 2001, as determined
25 by the Governor, into the Budget Stabilization Fund. The
26 Treasurer may invest the moneys in the Budget Stabilization
27 Fund in the same manner, in the same types of investments,
28 and subject to the same limitations provided in the Illinois
29 Pension Code for the investment of pension funds other than
30 those established under Article 3 or 4 of the Code.
31 (c) As soon as practical in fiscal year 2003, there
32 shall be transferred from the Tobacco Settlement Recovery
33 Fund to the Financially Distressed Provider Credit
34 Enhancement Fund an amount to be certified by the Director of
-13- LRB9216107SMcdam01
1 the Bureau of the Budget to the State Treasurer and the State
2 Comptroller to be equal to: (x) the amount projected by the
3 Director to be the debt service reserve requirement to be
4 established in connection with the issuance of the maximum
5 amount of bonds authorized by Section 17.3 of the Illinois
6 Health Facilities Authority Act times (y) 1.25 (the product
7 of (x) times (y) being referred to as the "estimated
8 amount"). On June 30, 2003, the Director shall certify to the
9 State Treasurer and the State Comptroller: (i) the debt
10 service reserve requirement actually established in
11 connection with all bonds issued under Section 17.3 of the
12 Illinois Health Facilities Authority Act (referred to as the
13 "reserve requirement"); (ii) 125% of the reserve requirement;
14 and (iii) the difference between the estimated amount and the
15 amount certified under item (ii). The State Comptroller shall
16 direct and the State Treasurer shall transfer the amount
17 certified under item (iii) from the Financially Distressed
18 Provider Credit Enhancement Fund to the Tobacco Settlement
19 Recovery Fund.
20 (d) In each fiscal year, beginning with fiscal year
21 2004, there shall be transferred from the Tobacco Settlement
22 Recovery Fund for deposit into the Financially Distressed
23 Provider Credit Enhancement Fund an amount equal to the
24 reserve requirement. This transfer shall be made in each
25 fiscal year prior to any other use, transfer, or application
26 of moneys in the Tobacco Settlement Recovery Fund. This
27 Section constitutes an irrevocable and continuing
28 appropriation from the Tobacco Settlement Recovery Fund of
29 all amounts necessary for that purpose and the irrevocable
30 and continuing authority for and direction to the State
31 Treasurer and the State Comptroller to make those transfers
32 and deposits.
33 (Source: P.A. 91-646, eff. 11-19-99; 91-704, eff. 7-1-00;
34 91-797, eff. 6-9-00; 92-11, eff. 6-11-01; 92-16, eff.
-14- LRB9216107SMcdam01
1 6-28-01.)
2 (30 ILCS 105/8.45 new)
3 Sec. 8.45. Financially Distressed Provider Credit
4 Enhancement Fund.
5 (a) The State Comptroller and the State Treasurer shall
6 transfer into the Financially Distressed Provider Credit
7 Enhancement Fund from the Tobacco Settlement Recovery Fund
8 all amounts required to the transferred under subsections (c)
9 and (d) of Section 6z-43. In addition, there shall be
10 deposited into the Financially Distressed Provider Credit
11 Enhancement Fund all amounts directed to be deposited into
12 that Fund under an agreement executed in accordance with the
13 provisions of subsection (g) of Section 17.4 of the Illinois
14 Health Facilities Authority Act.
15 (b) On June 30, 2004, and on each June 30 thereafter,
16 all amounts in the Financially Distressed Provider Credit
17 Enhancement Fund that are in excess of 125% of the reserve
18 requirement shall be transferred by the State Treasurer for
19 deposit into the Tobacco Settlement Recovery Fund. This
20 Section constitutes an irrevocable and continuing
21 appropriation from the Financially Distressed Provider Credit
22 Enhancement Fund of all amounts necessary for that purpose
23 and the irrevocable and continuing authority for and
24 direction to the State Treasurer and the State Comptroller to
25 make those transfers and deposits.".