Illinois General Assembly - Full Text of Public Act 096-0018
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Public Act 096-0018


 

Public Act 0018 96TH GENERAL ASSEMBLY



 


 
Public Act 096-0018
 
SB1609 Enrolled LRB096 08932 JAM 19069 b

    AN ACT concerning finance.
 
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
 
    Section 5. The General Obligation Bond Act is amended by
changing Sections 9, 11, and 16 as follows:
 
    (30 ILCS 330/9)  (from Ch. 127, par. 659)
    Sec. 9. Conditions for Issuance and Sale of Bonds -
Requirements for Bonds.
    (a) Except as otherwise provided in this subsection, Bonds
shall be issued and sold from time to time, in one or more
series, in such amounts and at such prices as may be directed
by the Governor, upon recommendation by the Director of the
Governor's Office of Management and Budget. Bonds shall be in
such form (either coupon, registered or book entry), in such
denominations, payable within 25 years from their date, subject
to such terms of redemption with or without premium, bear
interest payable at such times and at such fixed or variable
rate or rates, and be dated as shall be fixed and determined by
the Director of the Governor's Office of Management and Budget
in the order authorizing the issuance and sale of any series of
Bonds, which order shall be approved by the Governor and is
herein called a "Bond Sale Order"; provided however, that
interest payable at fixed or variable rates shall not exceed
that permitted in the Bond Authorization Act, as now or
hereafter amended. Bonds shall be payable at such place or
places, within or without the State of Illinois, and may be
made registrable as to either principal or as to both principal
and interest, as shall be specified in the Bond Sale Order.
Bonds may be callable or subject to purchase and retirement or
tender and remarketing as fixed and determined in the Bond Sale
Order. Bonds (i) except for refunding Bonds satisfying the
requirements of Section 16 of this Act and sold during fiscal
year 2009, 2010, or 2011, must be issued with principal or
mandatory redemption amounts in equal amounts, with the first
maturity issued occurring within the fiscal year in which the
Bonds are issued or within the next succeeding fiscal year and
(ii) must mature or be , with Bonds issued maturing or subject
to mandatory redemption each fiscal year thereafter up to 25
years, except for refunding Bonds satisfying the requirements
of Section 16 of this Act and sold during fiscal year 2009,
2010, or 2011 which must mature or be subject to mandatory
redemption each fiscal year thereafter up to 16 years.
    In the case of any series of Bonds bearing interest at a
variable interest rate ("Variable Rate Bonds"), in lieu of
determining the rate or rates at which such series of Variable
Rate Bonds shall bear interest and the price or prices at which
such Variable Rate Bonds shall be initially sold or remarketed
(in the event of purchase and subsequent resale), the Bond Sale
Order may provide that such interest rates and prices may vary
from time to time depending on criteria established in such
Bond Sale Order, which criteria may include, without
limitation, references to indices or variations in interest
rates as may, in the judgment of a remarketing agent, be
necessary to cause Variable Rate Bonds of such series to be
remarketable from time to time at a price equal to their
principal amount, and may provide for appointment of a bank,
trust company, investment bank, or other financial institution
to serve as remarketing agent in that connection. The Bond Sale
Order may provide that alternative interest rates or provisions
for establishing alternative interest rates, different
security or claim priorities, or different call or amortization
provisions will apply during such times as Variable Rate Bonds
of any series are held by a person providing credit or
liquidity enhancement arrangements for such Bonds as
authorized in subsection (b) of this Section. The Bond Sale
Order may also provide for such variable interest rates to be
established pursuant to a process generally known as an auction
rate process and may provide for appointment of one or more
financial institutions to serve as auction agents and
broker-dealers in connection with the establishment of such
interest rates and the sale and remarketing of such Bonds.
    (b) In connection with the issuance of any series of Bonds,
the State may enter into arrangements to provide additional
security and liquidity for such Bonds, including, without
limitation, bond or interest rate insurance or letters of
credit, lines of credit, bond purchase contracts, or other
arrangements whereby funds are made available to retire or
purchase Bonds, thereby assuring the ability of owners of the
Bonds to sell or redeem their Bonds. The State may enter into
contracts and may agree to pay fees to persons providing such
arrangements, but only under circumstances where the Director
of the Governor's Office of Management and Budget certifies
that he or she reasonably expects the total interest paid or to
be paid on the Bonds, together with the fees for the
arrangements (being treated as if interest), would not, taken
together, cause the Bonds to bear interest, calculated to their
stated maturity, at a rate in excess of the rate that the Bonds
would bear in the absence of such arrangements.
    The State may, with respect to Bonds issued or anticipated
to be issued, participate in and enter into arrangements with
respect to interest rate protection or exchange agreements,
guarantees, or financial futures contracts for the purpose of
limiting, reducing, or managing interest rate exposure. The
authority granted under this paragraph, however, shall not
increase the principal amount of Bonds authorized to be issued
by law. The arrangements may be executed and delivered by the
Director of the Governor's Office of Management and Budget on
behalf of the State. Net payments for such arrangements shall
constitute interest on the Bonds and shall be paid from the
General Obligation Bond Retirement and Interest Fund. The
Director of the Governor's Office of Management and Budget
shall at least annually certify to the Governor and the State
Comptroller his or her estimate of the amounts of such net
payments to be included in the calculation of interest required
to be paid by the State.
    (c) Prior to the issuance of any Variable Rate Bonds
pursuant to subsection (a), the Director of the Governor's
Office of Management and Budget shall adopt an interest rate
risk management policy providing that the amount of the State's
variable rate exposure with respect to Bonds shall not exceed
20%. This policy shall remain in effect while any Bonds are
outstanding and the issuance of Bonds shall be subject to the
terms of such policy. The terms of this policy may be amended
from time to time by the Director of the Governor's Office of
Management and Budget but in no event shall any amendment cause
the permitted level of the State's variable rate exposure with
respect to Bonds to exceed 20%.
(Source: P.A. 92-16, eff. 6-28-01; 93-9, eff. 6-3-03; 93-666,
eff. 3-5-04; 93-839, eff. 7-30-04.)
 
    (30 ILCS 330/11)  (from Ch. 127, par. 661)
    Sec. 11. Sale of Bonds. Except as otherwise provided in
this Section, Bonds shall be sold from time to time pursuant to
notice of sale and public bid or by negotiated sale in such
amounts and at such times as is directed by the Governor, upon
recommendation by the Director of the Governor's Office of
Management and Budget. At least 25%, based on total principal
amount, of all Bonds issued each fiscal year shall be sold
pursuant to notice of sale and public bid. At all times during
each fiscal year, no more than 75%, based on total principal
amount, of the Bonds issued each fiscal year, shall have been
sold by negotiated sale. Failure to satisfy the requirements in
the preceding 2 sentences shall not affect the validity of any
previously issued Bonds; and further provided that refunding
Bonds satisfying the requirements of Section 16 of this Act and
sold during fiscal year 2009, 2010, or 2011 shall not be
subject to the requirements in the preceding 2 sentences.
    If any Bonds, including refunding Bonds, are to be sold by
negotiated sale, the Director of the Governor's Office of
Management and Budget shall comply with the competitive request
for proposal process set forth in the Illinois Procurement Code
and all other applicable requirements of that Code.
    If Bonds are to be sold pursuant to notice of sale and
public bid, the Director of the Governor's Office of Management
and Budget shall, from time to time, as Bonds are to be sold,
advertise the sale of the Bonds in at least 2 daily newspapers,
one of which is published in the City of Springfield and one in
the City of Chicago. The sale of the Bonds shall also be
advertised in the volume of the Illinois Procurement Bulletin
that is published by the Department of Central Management
Services. Each of the advertisements for proposals shall be
published once at least 10 days prior to the date fixed for the
opening of the bids. The Director of the Governor's Office of
Management and Budget may reschedule the date of sale upon the
giving of such additional notice as the Director deems adequate
to inform prospective bidders of such change; provided,
however, that all other conditions of the sale shall continue
as originally advertised.
    Executed Bonds shall, upon payment therefor, be delivered
to the purchaser, and the proceeds of Bonds shall be paid into
the State Treasury as directed by Section 12 of this Act.
(Source: P.A. 93-839, eff. 7-30-04.)
 
    (30 ILCS 330/16)  (from Ch. 127, par. 666)
    Sec. 16. Refunding Bonds. The State of Illinois is
authorized to issue, sell, and provide for the retirement of
General Obligation Bonds of the State of Illinois in the amount
of $4,839,025,000 $2,839,025,000, at any time and from time to
time outstanding, for the purpose of refunding any State of
Illinois general obligation Bonds then outstanding, including
the payment of any redemption premium thereon, any reasonable
expenses of such refunding, any interest accrued or to accrue
to the earliest or any subsequent date of redemption or
maturity of such outstanding Bonds and any interest to accrue
to the first interest payment on the refunding Bonds; provided
that all non-refunding Bonds in an issue that includes
refunding Bonds shall mature no later than the final maturity
date of Bonds being refunded; provided that no refunding Bonds
shall be offered for sale unless the net present value of debt
service savings to be achieved by the issuance of the refunding
Bonds is 3% or more of the principal amount of the refunding
Bonds to be issued; and further provided that, except for
refunding Bonds sold in fiscal year 2009, 2010, or 2011, the
maturities of the refunding Bonds shall not extend beyond the
maturities of the Bonds they refund, so that for each fiscal
year in the maturity schedule of a particular issue of
refunding Bonds, the total amount of refunding principal
maturing and redemption amounts due in that fiscal year and all
prior fiscal years in that schedule shall be greater than or
equal to the total amount of refunded principal and redemption
amounts that had been due over that year and all prior fiscal
years prior to the refunding.
     The Governor shall notify the State Treasurer and
Comptroller of such refunding. The proceeds received from the
sale of refunding Bonds shall be used for the retirement at
maturity or redemption of such outstanding Bonds on any
maturity or redemption date and, pending such use, shall be
placed in escrow, subject to such terms and conditions as shall
be provided for in the Bond Sale Order relating to the
Refunding Bonds. Proceeds not needed for deposit in an escrow
account shall be deposited in the General Obligation Bond
Retirement and Interest Fund. This Act shall constitute an
irrevocable and continuing appropriation of all amounts
necessary to establish an escrow account for the purpose of
refunding outstanding general obligation Bonds and to pay the
reasonable expenses of such refunding and of the issuance and
sale of the refunding Bonds. Any such escrowed proceeds may be
invested and reinvested in direct obligations of the United
States of America, maturing at such time or times as shall be
appropriate to assure the prompt payment, when due, of the
principal of and interest and redemption premium, if any, on
the refunded Bonds. After the terms of the escrow have been
fully satisfied, any remaining balance of such proceeds and
interest, income and profits earned or realized on the
investments thereof shall be paid into the General Revenue
Fund. The liability of the State upon the Bonds shall continue,
provided that the holders thereof shall thereafter be entitled
to payment only out of the moneys deposited in the escrow
account.
    Except as otherwise herein provided in this Section, such
refunding Bonds shall in all other respects be subject to the
terms and conditions of this Act.
(Source: P.A. 93-839, eff. 7-30-04.)
 
    Section 10. The Build Illinois Bond Act is amended by
changing Sections 6, 8, and 15 as follows:
 
    (30 ILCS 425/6)  (from Ch. 127, par. 2806)
    Sec. 6. Conditions for Issuance and Sale of Bonds -
Requirements for Bonds - Master and Supplemental Indentures -
Credit and Liquidity Enhancement.
    (a) Bonds shall be issued and sold from time to time, in
one or more series, in such amounts and at such prices as
directed by the Governor, upon recommendation by the Director
of the Governor's Office of Management and Budget. Bonds shall
be payable only from the specific sources and secured in the
manner provided in this Act. Bonds shall be in such form, in
such denominations, mature on such dates within 25 years from
their date of issuance, be subject to optional or mandatory
redemption, bear interest payable at such times and at such
rate or rates, fixed or variable, and be dated as shall be
fixed and determined by the Director of the Governor's Office
of Management and Budget in an order authorizing the issuance
and sale of any series of Bonds, which order shall be approved
by the Governor and is herein called a "Bond Sale Order";
provided, however, that interest payable at fixed rates shall
not exceed that permitted in "An Act to authorize public
corporations to issue bonds, other evidences of indebtedness
and tax anticipation warrants subject to interest rate
limitations set forth therein", approved May 26, 1970, as now
or hereafter amended, and interest payable at variable rates
shall not exceed the maximum rate permitted in the Bond Sale
Order. Said Bonds shall be payable at such place or places,
within or without the State of Illinois, and may be made
registrable as to either principal only or as to both principal
and interest, as shall be specified in the Bond Sale Order.
Bonds may be callable or subject to purchase and retirement or
remarketing as fixed and determined in the Bond Sale Order.
Bonds (i) except for refunding Bonds satisfying the
requirements of Section 15 of this Act and sold during fiscal
year 2009, 2010, or 2011, must be issued with principal or
mandatory redemption amounts in equal amounts, with the first
maturity issued occurring within the fiscal year in which the
Bonds are issued or within the next succeeding fiscal year and
(ii) must mature or be , with Bonds issued maturing or subject
to mandatory redemption each fiscal year thereafter up to 25
years, except for refunding Bonds satisfying the requirements
of Section 16 of this Act and sold during fiscal year 2009,
2010, or 2011 which must mature or be subject to mandatory
redemption each fiscal year thereafter up to 16 years.
    All Bonds authorized under this Act shall be issued
pursuant to a master trust indenture ("Master Indenture")
executed and delivered on behalf of the State by the Director
of the Governor's Office of Management and Budget, such Master
Indenture to be in substantially the form approved in the Bond
Sale Order authorizing the issuance and sale of the initial
series of Bonds issued under this Act. Such initial series of
Bonds may, and each subsequent series of Bonds shall, also be
issued pursuant to a supplemental trust indenture
("Supplemental Indenture") executed and delivered on behalf of
the State by the Director of the Governor's Office of
Management and Budget, each such Supplemental Indenture to be
in substantially the form approved in the Bond Sale Order
relating to such series. The Master Indenture and any
Supplemental Indenture shall be entered into with a bank or
trust company in the State of Illinois having trust powers and
possessing capital and surplus of not less than $100,000,000.
Such indentures shall set forth the terms and conditions of the
Bonds and provide for payment of and security for the Bonds,
including the establishment and maintenance of debt service and
reserve funds, and for other protections for holders of the
Bonds. The term "reserve funds" as used in this Act shall
include funds and accounts established under indentures to
provide for the payment of principal of and premium and
interest on Bonds, to provide for the purchase, retirement or
defeasance of Bonds, to provide for fees of trustees,
registrars, paying agents and other fiduciaries and to provide
for payment of costs of and debt service payable in respect of
credit or liquidity enhancement arrangements, interest rate
swaps or guarantees or financial futures contracts and indexing
and remarketing agents' services.
    In the case of any series of Bonds bearing interest at a
variable interest rate ("Variable Rate Bonds"), in lieu of
determining the rate or rates at which such series of Variable
Rate Bonds shall bear interest and the price or prices at which
such Variable Rate Bonds shall be initially sold or remarketed
(in the event of purchase and subsequent resale), the Bond Sale
Order may provide that such interest rates and prices may vary
from time to time depending on criteria established in such
Bond Sale Order, which criteria may include, without
limitation, references to indices or variations in interest
rates as may, in the judgment of a remarketing agent, be
necessary to cause Bonds of such series to be remarketable from
time to time at a price equal to their principal amount (or
compound accreted value in the case of original issue discount
Bonds), and may provide for appointment of indexing agents and
a bank, trust company, investment bank or other financial
institution to serve as remarketing agent in that connection.
The Bond Sale Order may provide that alternative interest rates
or provisions for establishing alternative interest rates,
different security or claim priorities or different call or
amortization provisions will apply during such times as Bonds
of any series are held by a person providing credit or
liquidity enhancement arrangements for such Bonds as
authorized in subsection (b) of Section 6 of this Act.
    (b) In connection with the issuance of any series of Bonds,
the State may enter into arrangements to provide additional
security and liquidity for such Bonds, including, without
limitation, bond or interest rate insurance or letters of
credit, lines of credit, bond purchase contracts or other
arrangements whereby funds are made available to retire or
purchase Bonds, thereby assuring the ability of owners of the
Bonds to sell or redeem their Bonds. The State may enter into
contracts and may agree to pay fees to persons providing such
arrangements, but only under circumstances where the Director
of the Bureau of the Budget (now Governor's Office of
Management and Budget) certifies that he reasonably expects the
total interest paid or to be paid on the Bonds, together with
the fees for the arrangements (being treated as if interest),
would not, taken together, cause the Bonds to bear interest,
calculated to their stated maturity, at a rate in excess of the
rate which the Bonds would bear in the absence of such
arrangements. Any bonds, notes or other evidences of
indebtedness issued pursuant to any such arrangements for the
purpose of retiring and discharging outstanding Bonds shall
constitute refunding Bonds under Section 15 of this Act. The
State may participate in and enter into arrangements with
respect to interest rate swaps or guarantees or financial
futures contracts for the purpose of limiting or restricting
interest rate risk; provided that such arrangements shall be
made with or executed through banks having capital and surplus
of not less than $100,000,000 or insurance companies holding
the highest policyholder rating accorded insurers by A.M. Best &
Co. or any comparable rating service or government bond
dealers reporting to, trading with, and recognized as primary
dealers by a Federal Reserve Bank and having capital and
surplus of not less than $100,000,000, or other persons whose
debt securities are rated in the highest long-term categories
by both Moody's Investors' Services, Inc. and Standard & Poor's
Corporation. Agreements incorporating any of the foregoing
arrangements may be executed and delivered by the Director of
the Governor's Office of Management and Budget on behalf of the
State in substantially the form approved in the Bond Sale Order
relating to such Bonds.
(Source: P.A. 93-839, eff. 7-30-04.)
 
    (30 ILCS 425/8)  (from Ch. 127, par. 2808)
    Sec. 8. Sale of Bonds. Bonds, except as otherwise provided
in this Section, shall be sold from time to time pursuant to
notice of sale and public bid or by negotiated sale in such
amounts and at such times as are directed by the Governor, upon
recommendation by the Director of the Governor's Office of
Management and Budget. At least 25%, based on total principal
amount, of all Bonds issued each fiscal year shall be sold
pursuant to notice of sale and public bid. At all times during
each fiscal year, no more than 75%, based on total principal
amount, of the Bonds issued each fiscal year shall have been
sold by negotiated sale. Failure to satisfy the requirements in
the preceding 2 sentences shall not affect the validity of any
previously issued Bonds; and further provided that refunding
Bonds satisfying the requirements of Section 15 of this Act and
sold during fiscal year 2009, 2010, or 2011 shall not be
subject to the requirements in the preceding 2 sentences.
    If any Bonds are to be sold pursuant to notice of sale and
public bid, the Director of the Governor's Office of Management
and Budget shall comply with the competitive request for
proposal process set forth in the Illinois Procurement Code and
all other applicable requirements of that Code.
    If Bonds are to be sold pursuant to notice of sale and
public bid, the Director of the Governor's Office of Management
and Budget shall, from time to time, as Bonds are to be sold,
advertise the sale of the Bonds in at least 2 daily newspapers,
one of which is published in the City of Springfield and one in
the City of Chicago. The sale of the Bonds shall also be
advertised in the volume of the Illinois Procurement Bulletin
that is published by the Department of Central Management
Services. Each of the advertisements for proposals shall be
published once at least 10 days prior to the date fixed for the
opening of the bids. The Director of the Governor's Office of
Management and Budget may reschedule the date of sale upon the
giving of such additional notice as the Director deems adequate
to inform prospective bidders of the change; provided, however,
that all other conditions of the sale shall continue as
originally advertised. Executed Bonds shall, upon payment
therefor, be delivered to the purchaser, and the proceeds of
Bonds shall be paid into the State Treasury as directed by
Section 9 of this Act. The Governor or the Director of the
Governor's Office of Management and Budget is hereby authorized
and directed to execute and deliver contracts of sale with
underwriters and to execute and deliver such certificates,
indentures, agreements and documents, including any
supplements or amendments thereto, and to take such actions and
do such things as shall be necessary or desirable to carry out
the purposes of this Act. Any action authorized or permitted to
be taken by the Director of the Governor's Office of Management
and Budget pursuant to this Act is hereby authorized to be
taken by any person specifically designated by the Governor to
take such action in a certificate signed by the Governor and
filed with the Secretary of State.
(Source: P.A. 93-839, eff. 7-30-04.)
 
    (30 ILCS 425/15)  (from Ch. 127, par. 2815)
    Sec. 15. Refunding Bonds. Refunding Bonds are hereby
authorized for the purpose of refunding any outstanding Bonds,
including the payment of any redemption premium thereon, any
reasonable expenses of such refunding, and any interest accrued
or to accrue to the earliest or any subsequent date of
redemption or maturity of outstanding Bonds; provided that all
non-refunding Bonds in an issue that includes refunding Bonds
shall mature no later than the final maturity date of Bonds
being refunded; provided that no refunding Bonds shall be
offered for sale unless the net present value of debt service
savings to be achieved by the issuance of the refunding Bonds
is 3% or more of the principal amount of the refunding Bonds to
be issued; and further provided that, except for refunding
Bonds sold in fiscal year 2009, 2010, or 2011, the maturities
of the refunding Bonds shall not extend beyond the maturities
of the Bonds they refund, so that for each fiscal year in the
maturity schedule of a particular issue of refunding Bonds, the
total amount of refunding principal maturing and redemption
amounts due in that fiscal year and all prior fiscal years in
that schedule shall be greater than or equal to the total
amount of refunded principal and redemption amounts that had
been due over that year and all prior fiscal years prior to the
refunding.
    Refunding Bonds may be sold in such amounts and at such
times, as directed by the Governor upon recommendation by the
Director of the Governor's Office of Management and Budget. The
Governor shall notify the State Treasurer and Comptroller of
such refunding. The proceeds received from the sale of
refunding Bonds shall be used for the retirement at maturity or
redemption of such outstanding Bonds on any maturity or
redemption date and, pending such use, shall be placed in
escrow, subject to such terms and conditions as shall be
provided for in the Bond Sale Order relating to the refunding
Bonds. This Act shall constitute an irrevocable and continuing
appropriation of all amounts necessary to establish an escrow
account for the purpose of refunding outstanding Bonds and to
pay the reasonable expenses of such refunding and of the
issuance and sale of the refunding Bonds. Any such escrowed
proceeds may be invested and reinvested in direct obligations
of the United States of America, maturing at such time or times
as shall be appropriate to assure the prompt payment, when due,
of the principal of and interest and redemption premium, if
any, on the refunded Bonds. After the terms of the escrow have
been fully satisfied, any remaining balance of such proceeds
and interest, income and profits earned or realized on the
investments thereof shall be paid into the General Revenue
Fund. The liability of the State upon the refunded Bonds shall
continue, provided that the holders thereof shall thereafter be
entitled to payment only out of the moneys deposited in the
escrow account and the refunded Bonds shall be deemed paid,
discharged and no longer to be outstanding.
    Except as otherwise herein provided in this Section, such
refunding Bonds shall in all other respects be issued pursuant
to and subject to the terms and conditions of this Act and
shall be secured by and payable from only the funds and sources
which are provided under this Act.
(Source: P.A. 93-839, eff. 7-30-04.)
 
    Section 99. Effective date. This Act takes effect upon
becoming law.

Effective Date: 6/26/2009