Section 70 ILCS 210/10.1 - Issue of refunding bonds(a) The Authority is hereby authorized to provide for the issuance, from time to time, of refunding or advance refunding bonds for the purpose of refunding any bonds or notes then outstanding (herein collectively referred to as bonds) at or prior to maturity or on any redemption date, whether an entire issue or series, or one or more issues or series, or any portions or parts of any issue or series, which shall have been issued under the provisions of this Act. (b) The proceeds of any such refunding bonds may be used to carry out one or more of the following purposes: (1) To pay the principal amount of all outstanding bonds to be retired at maturity or redeemed prior to maturity; (2) To pay the total amount of any redemption premium incident to redemption of such outstanding bonds to be refunded; (3) To pay the total amount of any interest accrued or to accrue to the date or dates of redemption or maturity of such outstanding bonds to be refunded; (4) To pay any and all costs or expenses incident to such refunding; (5) To establish reserves for the payment of such refunding bonds and the interest thereon. (c) The issuance of refunding bonds, the maturities and other details thereof, the rights of the holders thereof and the rights, duties and obligations of the Authority in respect of the same shall be governed by the provisions of this Act, insofar as the same may be applicable, and may in harmony therewith be augmented or supplemented by resolution or ordinance to conform to the facts and circumstances prevailing in each instance of issuance of such refunding bonds; provided that, with respect to refunding or advance refunding bonds issued before January 1, 1991, the Authority shall consult with the Illinois Governor's Office of Management and Budget (formerly Bureau of the Budget) to develop the structure of the proposed transaction. After the adoption by the Board of an ordinance authorizing the issuance of such refunding bonds before January 1, 1991, and the execution of any proposal or contract relating to the sale thereof, the Authority shall prepare and deliver a report as soon as practical to the Director of the Governor's Office of Management and Budget (formerly Bureau of the Budget), the President of the Senate, the Minority Leader of the Senate, the Speaker of the House of Representatives and the Minority Leader of the House of Representatives setting forth the amount of refunding bonds, the interest rate or rates, a schedule of estimated debt service requirements, the projected cost savings to the State, the method or manner of the sale and any participants therein, including underwriters, financial advisors, attorneys, accountants, trustees, printers, registrars and paying agents.
(d) With reference to the investment of the proceeds of any such refunding bonds, the interest on which is exempt from tax under federal law, the Authority shall not authorize or anticipate investment earnings exceeding such as are authorized or permitted under prevailing federal laws, regulations and administrative rulings relating to arbitrage bonds. (e) The proceeds of any such refunding bonds (together with any other funds available for application to refunding purposes, if so provided or permitted by ordinance authorizing the issuance of such refunding bonds or in a trust agreement securing the same) may be placed in trust to be applied to the purchase, retirement at maturity or redemption of the bonds to be refunded on such dates as may be determined by the Authority. Pending application thereof, the proceeds of such refunding bonds and such other available funds, if any, may be invested in direct obligations of, or obligations the principal thereof and the interest on which are unconditionally guaranteed by, the United States of America which shall mature, or which shall be subject to redemption by the holder thereof at its option not later than the respective date or dates when such proceeds and other available funds, if any, (either together with the interest accruing thereon or without considering the interest accruing thereon) will be required for the refunding purpose intended or authorized. (f) Upon the deposit of the proceeds of the refunding bonds (together with any other funds available for application to refunding purposes, if so provided or permitted by ordinance authorizing the issuance of such refunding bonds or in a trust agreement securing the same) in an irrevocable trust pursuant to a trust agreement with a trustee requiring the trustee to satisfy the obligations of the Authority to timely redeem and retire the outstanding bonds for which the proceeds and other funds, if any, are deposited, in an amount sufficient to satisfy the obligation of the Authority to timely redeem and retire such outstanding bonds or upon the deposit in such irrevocable trust of direct obligations which, or obligations the principal and interest of which, are unconditionally guaranteed by the United States of America, in an amount sufficient to pay all principal and all interest accrued and to be accrued in respect of the bonds to be refunded from the reinvestment of such principal and interest, or in such amounts so that upon maturity (or upon optional redemption by the trustee) of such obligations amounts will be produced, taking into account investment earnings, on a timely basis sufficient to satisfy the obligations of the Authority to timely redeem and retire such outstanding bonds, and notwithstanding any provision of any ordinance or trust agreement authorizing the issuance of such outstanding bonds to the contrary, such outstanding bonds shall be deemed paid and no longer be deemed to be outstanding for purposes of such ordinance or trust agreement, and all rights and obligations of the bond holders and the Authority under such prior ordinance or trust agreement shall be deemed discharged, provided, however, that the holders of such outstanding bonds shall have an irrevocable and unconditional right to payment in full of all principal of and premium if any and interest on such outstanding bonds when due from the amounts on deposit in such trust. The trustee shall be any trust company or bank in the State of Illinois having the power of a trust company possessing capital and surplus of not less than $100,000,000. (g) Bond proceeds on deposit in the construction fund, are authorized to be used to pay principal or interest on the refunded bonds and the Authority is authorized to issue bonds for the purpose of reimbursing its construction fund in the amount of the bond proceeds used in connection with the refunding issuance. That portion of the bond proceeds used to reimburse the construction fund shall be deemed refunding bonds for the purposes of this Act.Amended by P.A. 094-0793, § 575, eff. 5/19/2006.