(20 ILCS 3501/820-50)
Sec. 820-50. Pledge of Funds by Units of Local Government.
(a) Pledge of Funds. Any unit of local government which receives funds from the Department of Revenue, including without limitation funds received pursuant to Sections 8-11-1, 8-11-1.4, 8-11-5 or 8-11-6 of the Illinois Municipal Code, the Home Rule County Retailers' Occupation Tax Act, the Home Rule County Service Occupation Tax Act, Sections 25.05-2, 25.05-3 or 25.05-10 of "An Act to revise the law in relation to counties", Section 5.01 of the Local Mass Transit District Act, Section 4.03 of the Regional Transportation Authority Act, Sections 2 or 12 of the State Revenue Sharing Act, or from the Department of Transportation pursuant to Section 8 of the Motor Fuel Tax Law, or from the State Superintendent of Education (directly or indirectly through regional superintendents of schools) pursuant to Article 18 of the School Code, or any unit of government which receives other funds which are at any time in the custody of the State Treasurer, the State Comptroller, the Department of Revenue, the Department of Transportation or the State Superintendent of Education may by appropriate proceedings, pledge to the Authority or any entity acting on behalf of the Authority (including, without limitation, any trustee), any or all of such receipts to the extent that such receipts are necessary to provide revenues to pay the principal of, premium, if any, and interest on, and other fees related to, or to secure, any of the local government securities of such unit of local government which have been sold or delivered to the Authority or its designee or to pay lease rental payments to be made by such unit of local government to the extent that such lease rental payments secure the payment of the principal of, premium, if any, and interest on, and other fees related to, any local government securities which have been sold or delivered to the Authority or its designee. Any pledge of such receipts (or any portion thereof) shall constitute a first and prior lien thereon and shall be binding from the time the pledge is made.
(b) Direct Payment of Pledged Receipts. Any such unit of local government may, by such proceedings, direct that all or any of such pledged receipts payable to such unit of local government be paid directly to the Authority or such other entity (including, without limitation, any trustee) for the purpose of paying the principal of, premium, if any, and interest on, and fees relating to, such local government securities or for the purpose of paying such lease rental payments to the extent necessary to pay the principal of, premium, if any, and interest on, and other fees related to, such local government securities secured by such lease rental payments. Upon receipt of a certified copy of such proceedings by the State Treasurer, the State Comptroller, the Department of Revenue, the Department of Transportation or the State Superintendent of Education, as the case may be, such Department or State Superintendent shall direct the State Comptroller and State Treasurer to pay to, or on behalf of, the Authority or such other entity (including, without limitation, any trustee) all or such portion of the pledged receipts from the Department of Revenue, or the Department of Transportation or the State Superintendent of Education (directly or indirectly through regional superintendents of schools), as the case may be, sufficient to pay the principal of and premium, if any, and interest on, and other fees related to, the local governmental securities for which the pledge was made or to pay such lease rental payments securing such local government securities for which the pledge was made. The proceedings shall constitute authorization for such a directive to the State Comptroller to cause orders to be drawn and to the State Treasurer to pay in accordance with such directive. To the extent that the Authority or its designee notifies the Department of Revenue, the Department of Transportation or the State Superintendent of Education, as the case may be, that the unit of local government has previously paid to the Authority or its designee the amount of any principal, premium, interest and fees payable from such pledged receipts, the State Comptroller shall cause orders to be drawn and the State Treasurer shall pay such pledged receipts to the unit of local government as if they were not pledged receipts. To the extent that such receipts are pledged and paid to the Authority or such other entity, any taxes which have been levied or fees or charges assessed pursuant to law on account of the issuance of such local government securities shall be paid to the unit of local government and may be used for the purposes for which the pledged receipts would have been used.
(c) Payment of Pledged Receipts upon Default. Any such unit of local government may, by such proceedings, direct that such pledged receipts payable to such unit of local government be paid to the Authority or such other entity (including, without limitation, any trustee) upon a default in the payment of any principal of, premium, if any, or interest on, or fees relating to, any of the local government securities of such unit of local government which have been sold or delivered to the Authority or its designee or any of the local government securities which have been sold or delivered to the Authority or its designee and which are secured by such lease rental payments. If such local governmental security is in default as to the payment of principal thereof, premium, if any, or interest thereon, or fees relating thereto, to the extent that the State Treasurer, the State Comptroller, the Department of Revenue, the Department of Transportation or the State Superintendent of Education (directly or indirectly through regional superintendents of schools) shall be the custodian at any time of any other available funds or moneys pledged to the payment of such local government securities or such lease rental payments securing such local government securities pursuant to this Section and due or payable to such a unit of local government at any time subsequent to written notice to the State Comptroller and State Treasurer from the Authority or any entity acting on behalf of the Authority (including, without limitation, any trustee) to the effect that such unit of local government has not paid or is in default as to payment of the principal of, premium, if any, or interest on, or fees relating to, any local government security sold or delivered to the Authority or any such entity (including, without limitation, any trustee) or has not paid or is in default as to the payment of such lease rental payments securing the payment of the principal of, premium, if any, or interest on, or other fees relating to, any local government security sold or delivered to the Authority or such other entity (including, without limitation, any trustee):
(i) The State Comptroller and the State Treasurer
shall withhold the payment of such funds or moneys from such unit of local government until the amount of such principal, premium, if any, interest or fees then due and unpaid has been paid to the Authority or any such entity (including, without limitation, any trustee), or the State Comptroller and the State Treasurer have been advised that arrangements, satisfactory to the Authority or such entity, have been made for the payment of such principal, premium, if any, interest and fees; and
(ii) Within 10 days after a demand for payment by the
Authority or such entity given to such unit of local government, the State Treasurer and the State Comptroller, the State Treasurer shall pay such funds or moneys as are legally available therefor to the Authority or such entity for the payment of principal of, premium, if any, or interest on, or fees relating to, such local government securities. The Authority or any such entity may carry out this Section and exercise all the rights, remedies and provisions provided or referred to in this Section.
(d) Remedies. Upon the sale or delivery of any local government securities of the Authority or its designee, the local government which issued such local government securities shall be deemed to have agreed that upon its failure to pay interest or premium, if any, on, or principal of, or fees relating to, the local government securities sold or delivered to the Authority or any entity acting on behalf of the Authority (including, without limitation, any trustee) when payable, all statutory defenses to nonpayment are thereby waived. Upon a default in payment of principal of or interest on any local government securities issued by a unit of local government and sold or delivered to the Authority or its designee, and upon demand on the unit of local government for payment, if the local government securities are payable from property taxes and funds are not legally available in the treasury of the unit of local government to make payment, an action in mandamus for the levy of a tax by the unit of local government to pay the principal of or interest on the local government securities shall lie, and the Authority or such entity shall be constituted a holder or owner of the local government securities as being in default. Upon the occurrence of any failure or default with respect to any local government securities issued by a unit of local government, the Authority or such entity may thereupon avail itself of all remedies, rights and provisions of law applicable in the circumstances, and the failure to exercise or exert any rights or remedies within a time or period provided by law may not be raised as a defense by the unit of local government.
(Source: P.A. 93-205, eff. 1-1-04.)
Sections: Previous 820-5 820-10 820-15 820-20 820-25 820-30 820-35 820-40 820-45 820-50 820-55 820-60 Next
Last modified: February 18, 2015