§ 34-29.2 — Debt service funds for obligations

Illinois § 34-29.2

• Jurisdiction: Illinois
• Topic: EDUCATION
• Ch. 105: SCHOOLS
• Act 105 ILCS 5/: School Code.
• Art.: Article 34 - Cities Of Over 500,000 Inhabitants - Board Of Education

Text

(a) The board shall establish debt service funds, each to be maintained by a corporate trustee (which may be any trust company or bank having the power of a trust company within the State) separate and segregated from all other funds and accounts of the board, for those issues of obligations of the board for the payment of which a separate tax has been or is to be levied, including, without limitation, a debt service fund for the general obligation bonds of the board, a debt service fund for the general obligation notes of the board and a debt service fund for the lease rentals payable by the board to the Public Building Commission of Chicago. Such funds shall be established for each such outstanding obligation of the board and also for each such obligation as shall be issued by the board after the effective date of this amendatory Act of 1981. The trustee maintaining each such debt service fund shall account separately on its books and records for each such issue of such obligations. (b) The city treasurer, as ex officio treasurer of the board, shall, with respect to each collection of taxes levied on behalf of the board, allocate the amounts collected among the issues of such obligations and deliver a report of such allocation to the county collector of each county wherein the board is located. On the basis of such allocation, the county collector shall pay the proceeds of each separate tax levied for the payment of any issue of such obligations upon receipt directly to the corporate trustee maintaining the debt service fund for such obligations for deposit in such debt service fund. In addition, the board shall pay the amount of personal property tax replacement tax revenues applicable to each issue of such obligations upon receipt directly to the corporate trustee maintaining the debt service fund for such obligations for deposit in such debt service fund. Each such deposit shall be held in trust for the benefit of the party or parties to whom payment of such obligations is payable. All such proceeds of such taxes and revenues shall be applied solely for the payment of the related obligations and shall not be used for any other purpose until such obligations are paid in full. Each levy of such taxes shall be for the sole benefit of the party or parties to whom payment of such obligations is payable and such party or parties shall have a security interest in and lien upon all rights, claims and interest of the board arising pursuant to any such levy and all present and future proceeds of such levy until such obligations are paid in full. Such party or parties shall further have a security interest in and lien upon all personal property tax replacement tax revenues upon deposit in the appropriate debt service fund as above provided. (c) Any lien or security interest for the benefit of the party or parties to whom any such obligations are payable, made pursuant to this Act, shall be valid and binding from the effective date of the amendatory Act of 1980, and with respect to any obligations issued after the effective date of this amendatory Act of 1981, shall be valid and binding from the date of issue of such obligations, in each case without any physical delivery or further act, and shall be valid and binding as against, and prior to any claims of, all other parties having claims of any kind in tort, contract or otherwise, against the board, irrespective of whether such parties have notice thereof. (d) Any monies on deposit in any such debt service fund and not necessary for immediate use may be invested or reinvested in Investment Obligations, as defined in Section 34A-103 of this Act. The board may from time to time withdraw from any such debt service fund, to the extent not prohibited by the resolution of the board authorizing issuance of such obligations, the amount of interest or other investment earnings in such funds but only to the extent that the total amounts in such fund after such withdrawal shall not be less than the requirements for that fund. Any amounts deposited in any such debt service fund not required for payment of principal of or interest on any obligation because that payment has been made or provided for may be withdrawn by the board from the fund at any time, but only to the extent that the total amount in the fund after the withdrawal is not less than the requirements for the fund. The board is not required to make any tax abatement with respect to any such amounts withdrawn or on account of any provision for payment of principal of or interest on obligations. Any amounts so withdrawn by the board may be used for any lawful purpose of the board.

Legislative History

(Source: P.A. 88-511.)