Bill Text: IL HB3452 | 2011-2012 | 97th General Assembly | Introduced

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Bill Title: Amends the Illinois Unemployment Insurance Trust Fund Financing Act. Provides that the quarterly report to the Employment Security Advisory Board concerning the Master Bond Fund is not required if the Master Bond Fund held a net balance of zero at the close of the immediately preceding calendar quarter, there have been no deposits into the Master Bond Fund within any of the immediately preceding 4 calendar quarters, and there have been no expenditures or transfers from the Master Bond Fund within any of the immediately preceding 4 calendar quarters. Effective immediately.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Failed) 2013-01-08 - Session Sine Die [HB3452 Detail]

Download: Illinois-2011-HB3452-Introduced.html

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97TH GENERAL ASSEMBLY State of Illinois 2011 and 2012 HB3452 Introduced 2/24/2011, by Rep. Brandon W. Phelps SYNOPSIS AS INTRODUCED:
30 ILCS 440/3
Amends the Unemployment Insurance Trust Fund Financing Act. Provides that the quarterly report to the Employment Security Advisory Board concerning the Master Bond Fund is not required if the Master Bond Fund held a net balance of zero at the close of the immediately preceding calendar quarter, there have been no deposits into the Master Bond Fund within any of the immediately preceding 4 calendar quarters, and there have been no expenditures or transfers from the Master Bond Fund within any of the immediately preceding 4 calendar quarters. Effective immediately.
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A BILL FOR
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AN ACT concerning finance.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Illinois Unemployment Insurance Trust Fund
Financing Act is amended by changing Section 3 as follows:
(30 ILCS 440/3)
Sec. 3. Definitions. For purposes of this Act:
A. "Act" shall mean the Illinois Unemployment Insurance
Trust Fund Financing Act.
B. "Benefits" shall have the meaning provided in the
Unemployment Insurance Act.
C. "Bond" means any type of revenue obligation, including,
without limitation, fixed rate, variable rate, auction rate or
similar bond, note, certificate, or other instrument,
including, without limitation, an interest rate exchange
agreement, an interest rate lock agreement, a currency exchange
agreement, a forward payment conversion agreement, an
agreement to provide payments based on levels of or changes in
interest rates or currency exchange rates, an agreement to
exchange cash flows or a series of payments, an option, put, or
call to hedge payment, currency, interest rate, or other
exposure, payable from and secured by a pledge of Fund Building
Receipts collected pursuant to the Unemployment Insurance Act,

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and all interest and other earnings upon such amounts held in
the Master Bond Fund, to the extent provided in the proceedings
authorizing the obligation.
D. "Bond Administrative Expenses" means expenses and fees
incurred to administer and issue, upon a conversion of any of
the Bonds from one mode to another and from taxable to
tax-exempt, the Bonds issued pursuant to this Act, including
fees for paying agents, trustees, financial advisors,
underwriters, remarketing agents, attorneys and for other
professional services necessary to ensure compliance with
applicable state or federal law.
E. "Bond Obligations" means the principal of a Bond and any
premium and interest on a Bond issued pursuant to this Act,
together with any amount owed under a related Credit Agreement.
F. "Credit Agreement" means, without limitation, a loan
agreement, a revolving credit agreement, an agreement
establishing a line of credit, a letter of credit, notes,
municipal bond insurance, standby bond purchase agreements,
surety bonds, remarketing agreements and the like, by which the
Department may borrow funds to pay or redeem or purchase and
hold its bonds, agreements for the purchase or remarketing of
bonds or any other agreement that enhances the marketability,
security, or creditworthiness of a Bond issued under this Act.
1. Such Credit Agreement shall provide the following:
a. The choice of law for the obligations of a
financial provider may be made for any state of these

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United States, but the law which shall apply to the
Bonds shall be the law of the State of Illinois, and
jurisdiction to enforce such Credit Agreement as
against the Department shall be exclusively in the
courts of the State of Illinois or in the applicable
federal court having jurisdiction and located within
the State of Illinois.
b. Any such Credit Agreement shall be fully
enforceable as a valid and binding contract as and to
the extent provided by applicable law.
2. Without limiting the foregoing, such Credit
Agreement, may include any of the following:
a. Interest rates on the Bonds may vary from time
to time depending upon criteria established by the
Director, which may include, without limitation:
(i) A variation in interest rates as may be
necessary to cause the Bonds to be remarketed from
time to time at a price equal to their principal
amount plus any accrued interest;
(ii) Rates set by auctions; or
(iii) Rates set by formula.
b. A national banking association, bank, trust
company, investment banker or other financial
institution may be appointed to serve as a remarketing
agent in that connection, and such remarketing agent
may be delegated authority by the Department to

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determine interest rates in accordance with criteria
established by the Department.
c. Alternative interest rates or provisions may
apply during such times as the Bonds are held by the
financial providers or similar persons or entities
providing a Credit Agreement for those Bonds and,
during such times, the interest on the Bonds may be
deemed not exempt from income taxation under the
Internal Revenue Code for purposes of State law, as
contained in the Bond Authorization Act, relating to
the permissible rate of interest to be borne thereon.
d. Fees may be paid to the financial providers or
similar persons or entities providing a Credit
Agreement, including all reasonably related costs,
including therein costs of enforcement and litigation
(all such fees and costs being financial provider
payments) and financial provider payments may be paid,
without limitation, from proceeds of the Bonds being
the subject of such agreements, or from Bonds issued to
refund such Bonds, provided that such financial
provider payments shall be made subordinate to the
payments on the Bonds.
e. The Bonds need not be held in physical form by
the financial providers or similar persons or entities
providing a Credit Agreement when providing funds to
purchase or carry the Bonds from others but may be

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represented in uncertificated form in the Credit
Agreement.
f. The debt or obligation of the Department
represented by a Bond tendered for purchase to or
otherwise made available to the Department thereupon
acquired by either the Department or a financial
provider shall not be deemed to be extinguished for
purposes of State law until cancelled by the Department
or its agent.
g. Such Credit Agreement may provide for
acceleration of the principal amounts due on the Bonds.
G. "Department" means the Illinois Department of
Employment Security.
H. "Director" means the Director of the Illinois Department
of Employment Security.
I. "Fund Building Rates" are those rates imposed pursuant
to Section 1506.3 of the Unemployment Insurance Act.
J. "Fund Building Receipts" shall have the meaning provided
in the Unemployment Insurance Act and includes earnings on such
receipts.
K. "Master Bond Fund" shall mean, for any particular
issuance of Bonds under this Act, the fund established for the
deposit of Fund Building Receipts upon or prior to the issuance
of Bonds under this Act, and during the time that any Bonds are
outstanding under this Act and from which the payment of Bond
Obligations and the related Bond Administrative Expenses

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incurred in connection with such Bonds shall be made. That
portion of the Master Bond Fund containing the Required Fund
Building Receipts Amount shall be irrevocably pledged to the
timely payment of Bond Obligations and Bond Administrative
Expenses due on any Bonds issued pursuant to this Act and any
Credit Agreement entered in connection with the Bonds. The
Master Bond Fund shall be held separate and apart from all
other State funds. Moneys in the Master Bond Fund shall not be
commingled with other State funds, but they shall be deposited
as required by law and maintained in a separate account on the
books of a savings and loan association, bank or other
qualified financial institution. All interest earnings on
amounts within the Master Bond Fund shall accrue to the Master
Bond Fund. The Master Bond Fund may include such funds and
accounts as are necessary for the deposit of bond proceeds,
Fund Building Receipts, payment of principal, interest,
administrative expenses, costs of issuance, in the case of
bonds which are exempt from Federal taxation, rebate payments,
and such other funds and accounts which may be necessary for
the implementation and administration of this Act. The Director
shall be liable on her or his general official bond for the
faithful performance of her or his duties as custodian of the
Master Bond Fund. Such liability on her or his official bond
shall exist in addition to the liability upon any separate bond
given by her or him. All sums recovered for losses sustained by
the Master Bond Fund shall be deposited into the Fund.

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The Director shall report quarterly in writing to the
Employment Security Advisory Board concerning the actual and
anticipated deposits into and expenditures and transfers made
from the Master Bond Fund. Notwithstanding any other provision
to the contrary, no report is required under this subsection K
if (i) the Master Bond Fund held a net balance of zero as of the
close of the immediately preceding calendar quarter, (ii) there
have been no deposits into the Master Bond Fund within any of
the immediately preceding 4 calendar quarters, and (iii) there
have been no expenditures or transfers from the Master Bond
Fund within any of the immediately preceding 4 calendar
quarters.
L. "Required Fund Building Receipts Amount" means the
aggregate amount of Fund Building Receipts required to be
maintained in the Master Bond Fund as set forth in Section 4I
of this Act.
(Source: P.A. 93-634, eff. 1-1-04; 94-1083, eff. 1-19-07.)
Section 99. Effective date. This Act takes effect upon
becoming law.