Sec. 13. Certain pledges.

575 words·~3 min read·/il/chapter-30/act-350/13

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

Sec. 13. Certain pledges. A governmental unit may pledge, as security for the payment of its bonds,

(1)revenues derived from the operation of any utility system or revenue producing enterprise,

(2)moneys deposited or to be deposited into any special fund of the governmental unit,

(3)grants or other revenues or taxes expected to be received by the governmental unit from the State or federal government, including taxes imposed by the governmental unit pursuant to grant of authority by the State, such as sales or use taxes or utility taxes,

(4)special assessments to be collected with respect to a local improvement financed with the proceeds of bonds, or

(5)payments to be made by another governmental unit pursuant to a service, user or other similar agreement with such governmental unit.

Any such pledge made by a governmental unit shall be valid and binding from the time such pledge is made. The revenues, moneys and other funds so pledged and thereafter received by the governmental unit shall immediately be subject to the lien of such pledge without any physical delivery thereof or further act; and, subject only to the provisions of prior agreements, the lien of such pledge shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the governmental unit irrespective of whether such parties have notice thereof.

Pursuant to any such pledge, a governmental unit may bind itself to impose rates, charges or taxes to the fullest extent permitted by applicable law. No ordinance, resolution, trust agreement or other instrument by which such pledge is created need be filed or recorded except in the records of the governmental unit.

The State Treasurer, the State Comptroller, the Department of Revenue, the Department of Transportation, the State Superintendent of Education, or any Regional Superintendent of Schools shall deposit or cause to be deposited any amount of grants or other revenues or taxes expected to be received by a qualified governmental unit from that official or entity that have been pledged to the payment of bonds of the qualified governmental unit, in accordance with the authorization of the qualified governmental unit, directly into a designated escrow account established by the qualified governmental unit at a trust company or bank having trust powers.

The ordinance authorizing that disposition shall, within 10 days after adoption by the governing body of the qualified governmental unit, be filed with the official or entity having custody of the pledged grants or other revenues or taxes.

For the purposes of this Section, "qualified governmental unit" means a governmental unit

(i)that has issued not less than $6,000,000 principal amount of bonds, including the principal amount of bonds to be secured by the deposit into the designated escrow account, during the 24 months preceding the adoption of the ordinance authorizing the deposit,

(ii)whose bonds secured by the deposit into the designated escrow account are rated without regard to any credit enhancement within the 3 highest general rating classifications established by a rating service of nationally recognized expertise in rating bonds of states and political subdivisions of states,

(iii)that has received the Certificate of Achievement for Excellence in Financial Reporting from the Government Finance Officers Association or the equivalent award from the Association of School Business Officials International during the 24 months preceding the adoption of the ordinance authorizing the deposit, or

(iv)that represents a population in excess of 300,000.