§ 825-90 — Illinois Power Agency Bonds

(a) In this Section: "Agency" means the Illinois Power Agency. "Agency loan agreement" means any agreement pursuant to which the Illinois Finance Authority agrees to loan the proceeds of its revenue bonds issued with respect to a specific Illinois Power Agency project to the Illinois Power Agency upon terms providing for loan repayment installments at least sufficient to pay when due all principal of, interest and premium, if any, on any revenue bonds of the Authority, if any, issued with respect to the Illinois Power Agency project, and providing for maintenance, insurance, and other matters as may be deemed desirable by the Authority. "Authority" means the Illinois Finance Authority. "Director" means the Director of the Illinois Power Agency. "Facility" means an electric generating unit or a co-generating unit that produces electricity along with related equipment necessary to connect the facility to an electric transmission or distribution system. "Governmental aggregator" means one or more units of local government that individually or collectively procures electricity to serve residential retail electrical loads located within its or their jurisdiction. "Local government" means a unit of local government as defined in Section 1 of Article VII of the Illinois Constitution of 1970. "Project" means any project as defined in the Illinois Power Agency Act. "Real property" means any interest in land, together with all structures, fixtures, and improvements thereon, including lands under water and riparian rights, any easements, covenants, licenses, leases, rights-of-way, uses, and other interests, together with any liens, judgments, mortgages, or other claims or security interests related to real property. "Revenue bond" means any bond, note, or other evidence of indebtedness issued by the Illinois Finance Authority on behalf of the Illinois Power Agency, the principal and interest of which is payable solely from revenues or income derived from any project or activity of the Agency. (b) Powers and duties; Illinois Power Agency Program. The Authority has the power: (1) To accept from time to time pursuant to an Agency loan agreement any pledge or a pledge agreement by the Agency subject to the requirements and limitations of the Illinois Power Agency Act. (2) To issue revenue bonds in one or more series pursuant to one or more resolutions of the Authority to loan funds to the Agency pursuant to one or more Agency loan agreements meeting the requirements of the Illinois Power Agency Act and providing for the payment of any interest deemed necessary on those revenue bonds, paying for the cost of issuance of those revenue bonds, providing for the payment of the cost of any guarantees, letters of credit, insurance contracts or other similar credit support or liquidity instruments, or providing for the funding of any reserves deemed necessary in connection with those revenue bonds and refunding or advance refunding of any such revenue bonds and the interest and any premium thereon, pursuant to this Act. Authority for the agreements shall conform to the requirements of the Illinois Power Agency Act. The Authority may issue up to $4,000,000,000 aggregate principal amount of revenue bonds, the net proceeds of which shall be loaned to the Agency pursuant to one or more Agency loan agreements. No revenue bonds issued to refund or advance refund revenue bonds issued under this Section may mature later than the longest maturity date of the series of bonds being refunded. After the aggregate original principal amount of revenue bonds authorized in this Section has been issued, the payment of any principal amount of those revenue bonds does not authorize the issuance of additional revenue bonds (except refunding revenue bonds). Such revenue bond authorization is in addition to any other bonds authorized in this Act. All bonds issued on behalf of the Agency must be issued by the Authority and must be revenue bonds. These revenue bonds may be taxable or tax-exempt. (3) To provide for the funding of any reserves or other funds or accounts deemed necessary by the Authority on behalf of the Agency in connection with its issuance of Agency revenue bonds. (4) To accept the pledge of any Agency revenue, including any payments thereon, and any other property or funds of the Agency or funds made available to the Authority through the applicable Agency loan agreement with the Agency that may be applied to such purpose, as security for any revenue bonds or any guarantees, letters of credit, insurance contracts, or similar credit support or liquidity instruments securing the revenue bonds. (5) To enter into agreements or contracts with third parties, whether public or private, including without limitation the United States of America, the State, or any department or agency thereof, to obtain any grants, loans, or guarantees that are deemed necessary or desirable by the Authority. Any such guarantee, agreement, or contract may contain terms and provisions necessary or desirable in connection with the program, subject to the requirements established by this Article. (6) To charge reasonable fees to defray the cost of obtaining letters of credit, insurance contracts, or other similar documents, and to charge such other reasonable fees to defray the cost of trustees, depositories, paying agents, legal counsel, bond registrars, escrow agents, and other administrative expenses. Any such fees shall be payable by the Agency, in such amounts and at such times as the Authority shall determine. (7) To obtain and maintain guarantees, letters of credit, insurance contracts, or similar credit support or liquidity instruments that are deemed necessary or desirable in connection with any revenue bonds or other obligations of the Authority for any Agency revenue bonds. (8) To provide technical assistance, at the request of the Agency, with respect to the financing or refinancing for any public purpose. (9) To sell, transfer, or otherwise defease revenue bonds issued on behalf of the Agency at the request and authorization of the Agency. (10) To enter into agreements or contracts with any person necessary or appropriate to place the payment obligations of the Agency relating to revenue bonds in whole or in part on any interest rate basis, cash flow basis, or other basis desired by the Authority, including without limitation agreements or contracts commonly known as "interest rate swap agreements", "forward payment conversion agreements", and "futures", or agreements or contracts to exchange cash flows or a series of payments, or agreements or contracts, including without limitation agreements or contracts commonly known as "options", "puts" or "calls", to hedge payment, rate spread, or similar exposure; provided, that any such agreement or contract shall not constitute an obligation for borrowed money, and shall not be taken into account under Section 845-5 of this Act or any other debt limit of the Authority or the State of Illinois. (11) To make and enter into all other agreements and contracts and execute all instruments necessary or incidental to performance of its duties and the execution of its powers under this Article. (12) To contract for and finance the costs of audits and to contract for and finance the cost of project monitoring. Any such contract shall be executed only after it has been jointly negotiated by the Authority and the Agency. (13) To exercise such other powers as are necessary or incidental to the foregoing. (c) Illinois Power Agency participation. The Agency is authorized to voluntarily participate in this program as described in the Illinois Power Agency Act. The Authority may issue revenue bonds on behalf of the Agency pursuant to an Agency loan agreement entered into by the parties as set forth in the Illinois Power Agency Act. Any proceeds from the sale of those revenue bonds shall be deposited into the Illinois Power Agency Facilities Fund to be used by the Agency for the purposes set forth in the Illinois Power Agency Act. (d) Pledge of revenues by the Agency. Any pledge of revenues or other moneys made by the Agency shall be binding from the time the pledge is made. Revenues and other moneys so pledged shall be held in the Illinois Power Agency Facilities Fund, Illinois Power Agency Debt Service Fund, or other funds as directed by the Agency loan agreement. Revenues or other moneys so pledged and thereafter received by the State Treasurer shall immediately be subject to the lien of the pledge without any physical delivery thereof or further act, and the lien of any pledge shall be binding against all parties having claims of any kind of tort, contract, or otherwise against the Authority, irrespective of whether the parties have notice thereof. Neither the resolution nor any other instrument by which a pledge is created need be filed or recorded except in the records of the Authority. The State pledges to and agrees with the holders of revenue bonds, and the beneficial owners of the revenue bonds issued on behalf of the Agency, that the State shall not limit or restrict the rights hereby vested in the Authority to purchase, acquire, hold, sell, or defease revenue bonds or other investments or to establish and collect such fees or other charges as may be convenient or necessary to produce sufficient revenues to meet the expenses of operation of the Authority, and to fulfill the terms of any agreement made with the holders of the revenue bonds issued by the Authority on behalf of the Agency or in any way impair the rights or remedies of the holders of those revenue bonds or the beneficial owners of the revenue bonds until those revenue bonds are fully paid and discharged or provision for their payment has been made. The revenue bonds shall not be a debt of the State, the Authority, any political subdivision thereof (other than the Agency to the extent provided therein), any governmental aggregator as defined in the Illinois Power Agency Act, or any local government, and neither the State, the Authority, any political subdivision thereof (other than the Agency to the extent provided therein), any governmental aggregator, nor any local government shall be liable thereon. The Authority shall not have the power to pledge the credit, the revenues, or the taxing power of the State, any political subdivision thereof (other than the Agency to the extent provided in the Agency loan agreement relating to the revenue bonds in question), any governmental aggregator, or of any local government, and neither the credit, the revenues, nor the taxing power of the State, any political subdivision thereof (other than the Agency to the extent provided in the Agency loan agreement relating to the revenue bonds in question), any governmental aggregator, or of any local government shall be, or shall be deemed to be, pledged to the payment of any revenue bonds, or obligations of the Agency. (e) Exemption from taxation. The creation of the Illinois Power Agency is in all respects for the benefit of the people of Illinois and for the improvement of their health, safety, welfare, comfort, and security, and its purposes are public purposes. In consideration thereof, the revenue bonds issued on behalf of the Agency pursuant to this Act and the income from these revenue bonds may be free from all taxation by the State or its political subdivisions, except for estate, transfer, and inheritance taxes. The exemption from taxation provided by the preceding sentence shall apply to the income on any revenue bonds issued on behalf of the Agency only if the Authority with concurrence of the Agency in its sole judgment determines that the exemption enhances the marketability of the revenue bonds or reduces the interest rates that would otherwise be borne by the revenue bonds and that the project for which the revenue bonds will be issued will be owned by the Agency or another governmental entity and that the project is used for public consumption. For purposes of Section 250 of the Illinois Income Tax Act, the exemption of the Agency shall terminate after all of the revenue bonds have been paid. The amount of the income that shall be added and then subtracted on the Illinois income tax return of a taxpayer, subject to Section 203 of the Illinois Income Tax Act, from federal adjusted gross income or federal taxable income in computing Illinois base income shall be the interest net of any bond premium amortization.

Legislative History

(Source: P.A. 95-481, eff. 8-28-07; 95-876, eff. 8-21-08.)