Round Lake Area Schools District #116
School Finance Authority

ARTICLE 1E. DOWNSTATE SCHOOL FINANCE AUTHORITY

5/1E-1 Short Title
5/1E-5. Findings; purpose; intent
5/1E-10. Definitions
5/1E-15. Establishment of Authority; duties of district
5/1E-20. Members of Authority; meetings
5/1E-25. General powers
5/1E-30. Chief executive officer
5/1E-35. Chief educational officer
5/1E-40. Chief fiscal officer
5/1E-45. Collective bargaining agreements
5/1E-50. Deposits and investments
5/1E-55. Cash accounts and bank accounts
5/1E-60. Financial, management, and budgetary structure
5/1E-65. Power to issue bonds
5/1E-70. Terms of bonds
5/1E-75. Tax levy
5/1E-80. Debt service fund
5/1E-85. Debt service reserve fund
5/1E-90. Bond anticipation notes
5/1E-95. Vesting powers in trustee or other authorized agent
5/1E-100. Discharge of bonds
5/1E-105. Pledge of the State
5/1E-110. Statutory lien
5/1E-115. State or district not liable on obligations
5/1E-125. Complete authority
5/1E-130. Reports
5/1E-135. Audit of Authority
5/1E-140. Assistance by State agencies, units of local
5/1E-145. Property of Authority exempt from taxation
5/1E-150. Sanctions
5/1E-155. Abolition of Authority
5/1E-160. Limitations of actions after abolition;
indemnification; legal representation

(105 ILCS 5/1E-1)
Sec. 1E-1. Short title. This Article may be cited as the Downstate
School Finance Authority Law.
(Source: P.A. 92-547, eff. 6-13-02.)

(105 ILCS 5/1E-5)
Sec. 1E-5. Findings; purpose; intent.
(a) The General Assembly finds all of the following:
(1) A fundamental goal of the people of this State, as
expressed in Section 1 of Article X of the Illinois Constitution, is
the educational development of all persons to the limits of their
capacities. When a board of education faces financial difficulties,
continued operation of the public school system is threatened.
(2) A sound financial structure is essential to the continued
operation of any school system. It is vital to commercial,
educational, and cultural interests that public schools remain in
operation. To achieve that goal, public school systems must have
effective access to the private market to borrow short and long term
funds.
(3) To promote the financial integrity of districts, as
defined in this Article, it is necessary to provide for the creation
of school finance authorities with the powers necessary to promote
sound financial management and to ensure the continued operation of
the public schools.
(b) It is the purpose of this Article to provide a secure financial
basis for the continued operation of public schools. The intention of
the General Assembly, in creating this Article, is to establish
procedures, provide powers, and impose restrictions to ensure the
financial and educational integrity of the public schools, while leaving
principal responsibility for the educational policies of public schools
to the boards of education within the State, consistent with the
requirements for satisfying the public policy and purpose set forth in
this Article.
(Source: P.A. 92-547, eff. 6-13-02.)

(105 ILCS 5/1E-10)
Sec. 1E-10. Definitions. As used in this Article:
"Authority" means a School Finance Authority created under this
Article.
"Bonds" means bonds authorized to be issued by the Authority under
Section 1E-65 of this Code.
"Budget" means the annual budget of the district required under
Section 17-1 of this Code, as in effect from time to time.
"Chairperson" means the Chairperson of the Authority.
"District" means any school district having a population of not more
than 500,000 that prior to the effective date of this amendatory Act of
the 92nd General Assembly has had a Financial Oversight Panel
established for the district under Section 1B-4 of this Code following
the district's petitioning of the State Board of Education for the
creation of the Financial Oversight Panel and for which the Financial
Oversight Panel has been in existence for at least one year.
"Financial plan" means the financial plan of the district to be
developed pursuant to this Article, as in effect from time to time.
"Fiscal year" means the fiscal year of the district.
"State Board" means the State Board of Education.
"State Superintendent" means the State Superintendent of Education.
"Obligations" means bonds and notes of the Authority.
(Source: P.A. 92-547, eff. 6-13-02.)

(105 ILCS 5/1E-15)
Sec. 1E-15. Establishment of Authority; duties of district.
(a) A Financial Oversight Panel created under Article 1B of this
Code for a district may petition the State Board for the establishment
of a School Finance Authority for the district. The petition shall cite
the reasons why the creation of a School Finance Authority for the
district is necessary. The State Board may grant the petition upon
determining that the approval of the petition is in the best educational
and financial interests of the district.
(b) Upon approval of the petition by the State Board all of the
following shall occur:
(1) There is established a body both corporate and politic to
be known as the "(Name of School District) School Finance
Authority", which in this name shall exercise all authority vested
in an Authority by this Article.
(2) The Financial Oversight Panel is abolished, and all of its
rights, property, assets, contracts, and liabilities shall pass to
and be vested in the Authority.
(3) The duties and obligations of the district under Article
1B of this Code shall be transferred and become duties and
obligations owed by the district to the School Finance Authority.
(c) In the event of a conflict between the provisions of this
Article and the provisions of Article 1B of this Code, the provisions of
this Article control.
(Source: P.A. 92-547, eff. 6-13-02.)

(105 ILCS 5/1E-20)
Sec. 1E-20. Members of Authority; meetings.
(a) When a petition for a School Finance Authority is allowed by
the State Board under Section 1E-15 of this Code, the State
Superintendent shall within 10 days thereafter appoint 5 members to
serve on a School Finance Authority for the district. Of the initial
members, 2 shall be appointed to serve a term of 2 years and 3 shall be
appointed to serve a term of 3 years. Thereafter, each member shall
serve for a term of 3 years and until his or her successor has been
appointed. The State Superintendent shall designate one of the members
of the Authority to serve as its Chairperson. In the event of vacancy or
resignation, the State Superintendent shall, within 10 days after
receiving notice, appoint a successor to serve out that member's term.
The State Superintendent may remove a member for incompetence,
malfeasance, neglect of duty, or other just cause.
Members of the Authority shall be selected primarily on the basis of
their experience and education in financial management, with
consideration given to persons knowledgeable in education finance. Two
members of the Authority shall be residents of the school district that
the Authority serves. A member of the Authority may not be a member of
the district's school board or an employee of the district nor may a
member have a direct financial interest in the district.
Authority members shall serve without compensation, but may be
reimbursed by the State Board for travel and other necessary expenses
incurred in the performance of their official duties. Unless paid from
bonds issued under Section 1E-65 of this Code, the amount reimbursed
members for their expenses shall be charged to the school district as
part of any emergency financial assistance and incorporated as a part of
the terms and conditions for repayment of the assistance or shall be
deducted from the district's general State aid as provided in Section
1B-8 of this Code.
The Authority may elect such officers as it deems appropriate.
(b) The first meeting of the Authority shall be held at the call of
the Chairperson. The Authority shall prescribe the times and places for
its meetings and the manner in which regular and special meetings may be
called and shall comply with the Open Meetings Act.
Three members of the Authority shall constitute a quorum. When a
vote is taken upon any measure before the Authority, a quorum being
present, a majority of the votes of the members voting on the measure
shall determine the outcome.
(Source: P.A. 92-547, eff. 6-13-02.)

(105 ILCS 5/1E-25)
Sec. 1E-25. General powers. The purposes of the Authority shall be
to exercise financial control over the district and to furnish financial
assistance so that the district can provide public education within the
district's jurisdiction while permitting the district to meet its
obligations to its creditors and the holders of its debt. Except as
expressly limited by this Article, the Authority shall have all powers
granted to a voluntary or involuntary Financial Oversight Panel and to a
Financial Administrator under Article 1B of this Code and all other
powers necessary to meet its responsibilities and to carry out its
purposes and the purposes of this Article, including without limitation
all of the following powers, provided that the Authority shall have no
power to violate any statutory provision, to impair any contract or
obligation of the district, or to terminate any employee without
following the statutory procedures for such terminations set forth in
this Code:
(1) To sue and to be sued.
(2) To make and execute contracts, leases, subleases and all
other instruments or agreements necessary or convenient for the
exercise of the powers and functions granted by this Article.
(3) To purchase real or personal property necessary or
convenient for its purposes; to execute and deliver deeds for real
property held in its own name; and to sell, lease, or otherwise
dispose of such of its property as, in the judgment of the
Authority, is no longer necessary for its purposes.
(4) To appoint officers, agents, and employees of the
Authority, including a chief executive officer, a chief fiscal
officer, and a chief educational officer; to define their duties and
qualifications; and to fix their compensation and employee benefits.
(5) To transfer to the district such sums of money as are not
required for other purposes.
(6) To borrow money and to issue obligations pursuant to this
Article; to fund, refund, or advance refund the same; to provide for
the rights of the holders of its obligations; and to repay any
advances.
(7) Subject to the provisions of any contract with or for the
benefit of the holders of its obligations, to purchase or redeem its
obligations.
(8) To procure all necessary goods and services for the
Authority in compliance with the purchasing laws and requirements
applicable to the district.
(9) To do any and all things necessary or convenient to carry
out its purposes and exercise the powers given to it by this
Article.
(Source: P.A. 92-547, eff. 6-13-02.)

(105 ILCS 5/1E-30)
Sec. 1E-30. Chief executive officer. The Authority may appoint a
chief executive officer who, under the direction of the Authority, shall
supervise the Authority's staff, including the chief educational officer
and the chief fiscal officer, and shall have ultimate responsibility for
implementing the policies, procedures, directives, and decisions of the
Authority.
(Source: P.A. 92-547, eff. 6-13-02.)

(105 ILCS 5/1E-35)
Sec. 1E-35. Chief educational officer. Upon expiration of the
contract of the school district's superintendent who is serving at the
time the Authority is established, the Authority shall, following
consultation with the district, employ a chief educational officer for
the district. The chief educational officer shall report to the
Authority or the chief executive officer appointed by the Authority.
The chief educational officer shall have all of the powers and
duties of a school district superintendent under this Code and such
other duties as may be assigned by the Authority, in accordance with
this Code. The district shall not thereafter employ a superintendent
during the period that a chief educational officer is serving in the
district. The chief educational officer shall hold a certificate with a
superintendent endorsement issued under Article 21 of this Code.
(Source: P.A. 92-547, eff. 6-13-02.)

(105 ILCS 5/1E-40)
Sec. 1E-40. Chief fiscal officer. The Authority may appoint a chief
fiscal officer who, under the direction of the Authority, shall have all
of the powers and duties of the district's chief school business
official and any other duties regarding budgeting, accounting, and other
financial matters that are assigned by the Authority, in accordance with
this Code. The district may not employ a chief school business official
during the period that the chief fiscal officer is serving in the
district. The chief fiscal officer may but is not required to hold a
certificate with a chief school business official endorsement issued
under Article 21 of this Code.
(Source: P.A. 92-547, eff. 6-13-02.)

(105 ILCS 5/1E-45)
Sec. 1E-45. Collective bargaining agreements. The Authority shall
have the power to negotiate collective bargaining agreements with the
district's employees in lieu of and on behalf of the district. Upon
concluding bargaining, the district shall execute the agreements
negotiated by the Authority, and the district shall be bound by and
shall administer the agreements in all respects as if the agreements had
been negotiated by the district itself.
(Source: P.A. 92-547, eff. 6-13-02.)

(105 ILCS 5/1E-50)
Sec. 1E-50. Deposits and investments.
(a) The Authority shall have the power to establish checking and
whatever other banking accounts it may deem appropriate for conducting
its affairs.
(b) Subject to the provisions of any contract with or for the
benefit of the holders of its obligations, the Authority may invest any
funds not required for immediate use or disbursement, as provided in the
Public Funds Investment Act.
(Source: P.A. 92-547, eff. 6-13-02.)

(105 ILCS 5/1E-55)
Sec. 1E-55. Cash accounts and bank accounts.
(a) The Authority shall require the district or any officer of the
district, including the district's treasurer, to establish and maintain
separate cash accounts and separate bank accounts in accordance with
such rules, standards, and procedures as the Authority may prescribe.
(b) The Authority shall have the power to assume exclusive
administration of the cash accounts and bank accounts of the district,
to establish and maintain whatever new cash accounts and bank accounts
it may deem appropriate, and to withdraw funds from these accounts for
the lawful expenditures of the district.
(Source: P.A. 92-547, eff. 6-13-02.)

(105 ILCS 5/1E-60)
Sec. 1E-60. Financial, management, and budgetary structure. Upon
direction of the Authority, the district shall reorganize the financial
accounts, management, and budgetary systems of the district in whatever
manner the Authority deems appropriate to achieve greater financial
responsibility and to reduce financial inefficiency.
(Source: P.A. 92-547, eff. 6-13-02.)

(105 ILCS 5/1E-65)
Sec. 1E-65. Power to issue bonds.
(a) The Authority may incur indebtedness by the issuance of
negotiable full faith and credit general obligation bonds of the
Authority in an outstanding amount not to exceed at any time, including
existing indebtedness, 13.8% of the district's most recent equalized
assessed valuation, excluding Bonds of the Authority that have been
refunded, for (i) the purpose of providing the district with moneys for
ordinary and necessary expenditures and other operational needs of the
district; (ii) payment or refunding of outstanding debt obligations or
tax anticipation warrants of the district, the proceeds of which were
used to provide financing for the district; (iii) payment of fees for
arrangements as provided in subsection (b) of Section 1E-70 of this
Code; (iv) payment of interest on Bonds; (v) establishment of reserves
to secure Bonds; (vi) the payment of costs of issuance of Bonds; (vii)
payment of principal of or interest or redemption premium on any Bonds
or notes of the Authority; and (viii) all other expenditures of the
Authority incidental to and necessary or convenient for carrying out its
corporate purposes and powers.
(b) The Authority may from time to time (i) issue Bonds to refund
any outstanding Bonds or notes of the Authority, whether the Bonds or
notes to be refunded have or have not matured or become redeemable, and
(ii) issue Bonds partly to refund Bonds or notes then outstanding and
partly for any other purpose set forth in this Section.
(c) Bonds issued in accordance with subsection (a) of this Section
are not subject to any other statutory limitation as to debt, including
without limitation that established by the Local Government Debt
Limitation Act, and may be issued without referendum.
(Source: P.A. 92-547, eff. 6-13-02.)

(105 ILCS 5/1E-70)
Sec. 1E-70. Terms of bonds.
(a) Whenever the Authority desires or is required to issue Bonds as
provided in this Article, it shall adopt a resolution designating the
amount of the Bonds to be issued, the purposes for which the proceeds of
the Bonds are to be used, and the manner in which the proceeds shall be
held pending the application thereof. The Bonds shall be issued in the
corporate name of the Authority and shall bear such date or dates and
shall mature at such time or times, not exceeding 20 years from their
date, as the resolution may provide. The Bonds may be issued as serial
bonds payable in installments, as term bonds with sinking fund
installments, or as a combination of these as the Authority may
determine in the resolution. The Bonds shall be in such denominations as
the Authority may determine. The Bonds shall be in such form, carry
such registration privileges, be executed in such manner, be payable at
such place or places, and be subject to such terms of redemption at such
redemption prices, including premium, as the resolution may provide. The
Bonds shall be sold by the Authority at public or private sale, as
determined by the Authority.
(b) In connection with the issuance of its Bonds, the Authority may
enter into arrangements to provide additional security and liquidity for
the Bonds. These may include without limitation municipal bond
insurance, letters of credit, lines of credit by which the Authority may
borrow funds to pay or redeem its Bonds, and purchase or remarketing
arrangements for ensuring the ability of owners of the Authority's Bonds
to sell their Bonds or to have their Bonds redeemed. The Authority may
enter into contracts and may agree to pay fees to persons providing the
arrangements, including from Bond proceeds, but only under circumstances
in which the total interest paid or to be paid on the Bonds, together
with the fees for the arrangements (being treated as if interest), would
not, taken together, cause the Bonds to bear interest, calculated to
their absolute maturity, at a rate in excess of the maximum rate allowed
by law.
The resolution of the Authority authorizing the issuance of its
Bonds may provide that interest rates may vary from time to time
depending upon criteria established by the Authority, which may include
without limitation a variation in interest rates as may be necessary to
cause the Bonds to be remarketable from time to time at a price equal to
their principal amount, and may provide for appointment of a national
banking association, bank, trust company, investment banker, or other
financial institution to serve as a remarketing agent in that
connection. The resolution of the Authority authorizing the issuance of
its Bonds may provide that alternative interest rates or provisions
shall apply during such times as the Bonds are held by a person
providing a letter of credit or other credit enhancement arrangement for
those Bonds.
(Source: P.A. 92-547, eff. 6-13-02.)

(105 ILCS 5/1E-75)
Sec. 1E-75. Tax levy.
(a) Before or at the time of issuing any Bonds, the Authority shall
provide by resolution for the levy and collection of a direct annual tax
upon all the taxable property located within the district without limit
as to rate or amount sufficient to pay and discharge the principal
thereof at maturity or on sinking fund installment dates and to pay the
interest thereon as it falls due. The taxes as levied shall also include
additional amounts to the extent that the collections in the prior years
were insufficient to pay and discharge the principal thereof at
maturity, sinking fund installments, if any, and interest thereon as it
fell due, and the amount so collected shall be placed in the debt
service reserve fund. The tax shall be in addition to and exclusive of
the maximum of all taxes that the Authority or the district is
authorized by law to levy for any and all school purposes. The
resolution shall be in force upon its adoption.
(b) The levy shall be for the sole benefit of the holders of the
Bonds, and the holders of the Bonds shall have a security interest in
and lien upon all rights, claims, and interests of the Authority arising
pursuant to the levy and all present and future proceeds of the levy
until the principal of and sinking fund installments and interest on the
Bonds are paid in full. All proceeds from the levy shall be deposited by
each county collector directly in the debt service fund established
pursuant to Section 1E-80 of this Code, shall be applied solely for the
payment of principal of and sinking fund installments and interest on
the Bonds, and shall not be used for any other purpose.
(c) Upon the filing in the office of the county clerk of each
county where the school district is located of a duly certified copy of
the resolution, it shall be the duty of each county clerk to extend the
tax provided for in the resolution, including an amount determined by
the Authority to cover loss and cost of collection and also deferred
collections and abatements in the amount of the taxes as extended on the
collectors' books. The tax shall be separate and apart from all other
taxes of the Authority or the district and shall be separately
identified by the collectors.
(Source: P.A. 92-547, eff. 6-13-02.)

(105 ILCS 5/1E-80)
Sec. 1E-80. Debt service fund. The Authority shall establish a debt
service fund for the Bonds to be maintained by a paying agent, escrow
agent, depository, or corporate trustee, which may be any trust company
or bank having the power of a trust company within this State, separate
and segregated from all other funds and accounts of the Authority and
the district. All moneys on deposit in the debt service fund shall be
held in trust in the debt service fund for the benefit of the holders of
the Bonds, shall be applied solely for the payment of the principal of
and sinking fund installment, redemption premium, if any, and interest
on the Bonds, and shall not be used for any other purpose. The holders
of the Bonds shall have a security interest in and lien upon all such
moneys.
(Source: P.A. 92-547, eff. 6-13-02.)

(105 ILCS 5/1E-85)
Sec. 1E-85. Debt service reserve fund.
(a) The Authority may create and establish a debt service reserve
fund to be maintained by a paying agent, escrow agent, depository, or
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 Authority. The Authority may pay the
following into the debt service reserve fund:
(1) any proceeds from the sale of Bonds to the extent provided
in the resolution authorizing the issuance of the Bonds; and
(2) any other moneys that may be available to the Authority
for the purpose of the fund.
(b) The amount to be accumulated in the debt service reserve fund
shall be determined by the Authority but shall not exceed the maximum
amount of interest, principal, and sinking fund installments due in any
succeeding calendar year.
(c) All moneys on deposit in the debt service reserve fund shall be
held in trust for the benefit of the holders of the Bonds, shall be
applied solely for the payment of principal of and sinking fund
installments and interest on the Bonds to the extent not paid from the
debt service fund, and shall not be used for any other purpose.
(d) Any moneys in the debt service reserve fund in excess of the
amount determined by the Authority pursuant to a resolution authorizing
the issuance of Bonds may be withdrawn by the Authority and used for any
of its lawful purposes.
(e) In computing the amount of the debt service reserve fund,
investments shall be valued as the Authority provides in the resolution
authorizing the issuance of the Bonds.
(Source: P.A. 92-547, eff. 6-13-02.)

(105 ILCS 5/1E-90)
Sec. 1E-90. Bond anticipation notes.
(a) After the issuance of Bonds has been authorized, the Authority
shall have power to issue from time to time, pursuant to a resolution or
resolutions of the Authority, negotiable bond anticipation notes of the
Authority in anticipation of the issuance of Bonds.
(b) Bond anticipation notes shall mature not later than 2 years
after the date of issuance, may be made redeemable prior to their
maturity, and may be sold in such manner, in such denominations, and at
such price or prices and shall bear interest at such rate or rates not
to exceed the maximum annual rate authorized by law, as a resolution
authorizing the issuance of the bond anticipation notes may provide.
(c) The bond anticipation notes may be made payable as to both
principal and interest from the proceeds of the Bonds. The Authority may
provide for payment of interest on the bond anticipation notes from
direct annual taxes upon all the taxable property located within the
district that are authorized to be levied annually for that purpose
without limit as to rate or amount sufficient to pay the interest as it
falls due, in the manner, subject to the security interest and lien, and
with the effect provided in Section 1E-75 of this Code.
(d) The Authority is authorized to issue renewal notes in the event
it is unable to issue Bonds to pay outstanding bond anticipation notes,
on terms the Authority deems reasonable.
(e) A debt service fund shall be established in the manner provided
in Section 1E-80 of this Code by the Authority for the bond anticipation
notes, and the proceeds of any tax levy made pursuant to this Section
shall be deposited in the fund upon receipt.
(Source: P.A. 92-547, eff. 6-13-02.)

(105 ILCS 5/1E-95)
Sec. 1E-95. Vesting powers in trustee or other authorized agent. The
resolution authorizing issuance of the Bonds shall vest in a trustee,
paying agent, escrow agent, or depository such rights, powers, and
duties in trust as the Authority may determine and may contain such
provisions for protecting and enforcing the rights and remedies of the
holders of the Bonds and limiting such rights and remedies as may be
reasonable and proper and not in violation of law, including covenants
setting forth the duties of the Authority in relation to the exercise of
its corporate powers and the custody, safeguarding, and application of
all moneys. The resolution shall provide for the manner in which moneys
in the various funds and accounts of the Authority may be invested and
the disposition of the earnings on the investments.
(Source: P.A. 92-547, eff. 6-13-02.)

(105 ILCS 5/1E-100)
Sec. 1E-100. Discharge of bonds.
(a) If the Authority pays or causes to be paid to the holders of
all Bonds then outstanding the principal, redemption price, if any, and
interest to become due on the Bonds, at the times and in the manner
stipulated therein and in the resolution authorizing the issuance of the
Bonds, then the covenants, agreements, and other obligations of the
Authority to the Bondholders shall be discharged and satisfied.
(b) Bonds or interest installments for the payment or redemption of
which moneys have been set aside and held in trust by the trustee or
other authorized agent provided for in Section 1E-95 of this Code,
through deposit by the Authority of funds for the payment, redemption,
or otherwise, at the maturity or redemption date, are deemed to have
been paid within the meaning and with the effect expressed in subsection
(a) of this Section. All outstanding Bonds of any series, prior to the
maturity or redemption date, are deemed to have been paid within the
meaning and with the effect expressed in subsection (a) of this Section
if (1) there has been deposited with the trustee or other authorized
agent either (A) moneys in an amount that is sufficient or (B) direct
obligations of the United States of America the principal of and the
interest on which, when due, will provide moneys that, together with the
moneys, if any, deposited with the trustee or other authorized agent at
the same time, are sufficient to pay, when due, the principal, sinking
fund installment, or redemption price, if applicable, of and interest
due and to become due on the Bonds on and prior to the redemption date,
sinking fund installment date, or maturity date, as the case may be, and
(2) the Authority has given the trustee or other authorized agent, in
form satisfactory to it, irrevocable instructions to give notice to the
effect and in accordance with the procedures provided in the resolution
authorizing the issuance of the Bonds. Neither direct obligations of the
United States of America, moneys deposited with the trustee or other
authorized agent, or principal or interest payments on the securities
shall be withdrawn or used for any purpose other than, and shall be held
in trust for, the payment of the principal or redemption price, if
applicable, and interest on the Bonds.
(Source: P.A. 92-547, eff. 6-13-02.)

(105 ILCS 5/1E-105)
Sec. 1E-105. Pledge of the State. The State of Illinois pledges to
and agrees with the holders of Bonds that the State will not limit or
alter the rights and powers vested in the Authority by this Article with
respect to the issuance of obligations so as to impair the terms of any
contract made by the Authority with these holders or in any way impair
the rights and remedies of these holders until the Bonds, together with
interest on the Bonds, interest on any unpaid installments of interest,
and all costs and expenses in connection with any action or proceedings
by or on behalf of these holders, are fully met and discharged or
provisions made for their payment. The Authority is authorized to
include this pledge and agreement of the State in any resolution or
contract with the holders of Bonds.
(Source: P.A. 92-547, eff. 6-13-02.)

(105 ILCS 5/1E-110)
Sec. 1E-110. Statutory lien. Any pledge, assignment, lien, or
security interest for the benefit of the holders of Bonds or bond
anticipation notes, if any, created pursuant to this Article are valid
and binding from the time the Bonds are issued, without any physical
delivery or further act, and are 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 State, the Authority, the district,
or any other person, irrespective of whether the other parties have
notice.
(Source: P.A. 92-547, eff. 6-13-02.)

(105 ILCS 5/1E-115)
Sec. 1E-115. State or district not liable on obligations.
Obligations shall not be deemed to constitute (i) a debt or liability of
the State, the district, or any political subdivision of the State or
district other than the Authority or (ii) a pledge of the full faith and
credit of the State, the district, or any political subdivision of the
State or district other than the Authority but shall be payable solely
from the funds and revenues provided for in this Article. The issuance
of obligations shall not directly, indirectly, or contingently obligate
the State, the district, or any political subdivision of the State or
district other than the Authority to levy any form of taxation therefor
or to make any appropriation for their payment. Nothing in this Section
shall prevent or be construed to prevent the Authority from pledging its
full faith and credit to the payment of obligations. Nothing in this
Article shall be construed to authorize the Authority to create a debt
of the State or the district within the meaning of the Constitution or
laws of Illinois, and all obligations issued by the Authority pursuant
to the provisions of this Article are payable and shall state that they
are payable solely from the funds and revenues pledged for their payment
in accordance with the resolution authorizing their issuance or any
trust indenture executed as security therefor. The State or the district
shall not in any event be liable for the payment of the principal of or
interest on any obligations of the Authority or for the performance of
any pledge, obligation, or agreement of any kind whatsoever that may be
undertaken by the Authority. No breach of any such pledge, obligation,
or agreement may impose any liability upon the State or the district or
any charge upon their general credit or against their taxing power.
(Source: P.A. 92-547, eff. 6-13-02.)

(105 ILCS 5/1E-120)
Sec. 1E-120. Obligations as legal investments. The obligations
issued under the provisions of this Article are hereby made securities
in which all public officers and bodies of this State, all political
subdivisions of this State, all persons carrying on an insurance
business, all banks, bankers, trust companies, saving banks, and savings
associations (including savings and loan associations, building and loan
associations, investment companies, and other persons carrying on a
banking business), and all credit unions, pension funds, administrators,
and guardians who are or may be authorized to invest in bonds or in
other obligations of the State may properly and legally invest funds,
including capital, in their control or belonging to them. The
obligations are also hereby made securities that may be deposited with
and may be received by all public officers and bodies of the State, all
political subdivisions of the State, and public corporations for any
purpose for which the deposit of bonds or other obligations of the State
is authorized.
(Source: P.A. 92-547, eff. 6-13-02.)

(105 ILCS 5/1E-125)
Sec. 1E-125. Complete authority. This Article, without reference to
any other law, shall be deemed full and complete authority for the
issuance of Bonds and bond anticipation notes as provided in this
Article.
(Source: P.A. 92-547, eff. 6-13-02.)

(105 ILCS 5/1E-130)
Sec. 1E-130. Reports.
(a) The Authority, upon taking office and annually thereafter,
shall prepare and submit to the Governor, General Assembly, and State
Superintendent a report that includes the audited financial statement
for the preceding fiscal year, an approved financial plan, and a
statement of the major steps necessary to accomplish the objectives of
the financial plan.
(b) Annual reports shall be submitted on or before March 1 of each
year.
(c) The requirement for reporting to the General Assembly shall be
satisfied by filing copies of the report as provided in Section 3.1 of
the General Assembly Organization Act and by filing additional copies
with the State Government Report Distribution Center for the General
Assembly as required under subdivision (t) of Section 7 of the State
Library Act.
(Source: P.A. 92-547, eff. 6-13-02.)

(105 ILCS 5/1E-135)
Sec. 1E-135. Audit of Authority. The Authority shall be subject to
audit in the manner provided for the audit of State funds and accounts.
A copy of the audit report shall be submitted to the State
Superintendent, the Governor, the Speaker and Minority Leader of the
House of Representatives, and the President and Minority Leader of the
Senate.
(Source: P.A. 92-547, eff. 6-13-02.)

(105 ILCS 5/1E-140)
Sec. 1E-140. Assistance by State agencies, units of local
government, and school districts. The district shall render such
services to and permit the use of its facilities and resources by the
Authority at no charge as may be requested by the Authority. Any State
agency, unit of local government, or school district may, within its
lawful powers and duties, render such services to the Authority as may
be requested by the Authority. Upon request of the Authority, any State
agency, unit of local government, or school district is authorized and
empowered to loan to the Authority such officers and employees as the
Authority may deem necessary in carrying out its functions and duties.
Officers and employees so transferred shall not lose or forfeit their
employment status or rights.
(Source: P.A. 92-547, eff. 6-13-02.)

(105 ILCS 5/1E-145)
Sec. 1E-145. Property of Authority exempt from taxation. The
property of the Authority is exempt from taxation.
(Source: P.A. 92-547, eff. 6-13-02.)

(105 ILCS 5/1E-150)
Sec. 1E-150. Sanctions.
(a) No member, officer, employee, or agent of the district may
commit the district to any contract or other obligation or incur any
liability on behalf of the district for any purpose if the amount of the
contract, obligation, or liability is in excess of the amount authorized
for that purpose then available under the financial plan and budget then
in effect.
(b) No member, officer, employee, or agent of the district may
commit the district to any contract or other obligation on behalf of the
district for the payment of money for any purpose required to be
approved by the Authority unless the contract or other obligation has
been approved by the Authority.
(c) No member, officer, employee, or agent of the district may take
any action in violation of any valid order of the Authority, may fail or
refuse to take any action required by any such order, may prepare,
present, certify, or report any information, including any projections
or estimates, for the Authority or any of its agents that is false or
misleading, or, upon learning that any such information is false or
misleading, may fail promptly to advise the Authority or its agents.
(d) In addition to any penalty or liability under any other law,
any member, officer, employee, or agent of the district who violates
subsection (a), (b), or (c) of this Section is subject to appropriate
administrative discipline as may be imposed by the Authority, including,
if warranted, suspension from duty without pay, removal from office, or
termination of employment.
(Source: P.A. 92-547, eff. 6-13-02.)

(105 ILCS 5/1E-155)
Sec. 1E-155. Abolition of Authority. The Authority shall be
abolished 10 years after its creation or one year after all its
obligations issued under the provisions of this Article have been fully
paid and discharged, whichever comes later. However, the State Board,
upon recommendation of the Authority and if no obligations are
outstanding, may abolish the Authority at any time after the Authority
has been in existence for 3 years. Upon the abolition of the Authority,
all of its records shall be transferred to the State Board and any
property of the Authority shall pass to and be vested in the State
Board.
(Source: P.A. 92-547, eff. 6-13-02.)

(105 ILCS 5/1E-160)
Sec. 1E-160. Limitations of actions after abolition;
indemnification; legal representation.
(a) Abolition of the Authority pursuant to Section 1E-155 of this
Code shall bar any remedy available against the Authority, its members,
employees, or agents for any right or claim existing or any liability
incurred prior to the abolition unless the action or other proceeding is
commenced prior to the expiration of 2 years after the date of the
abolition.
(b) The Authority may indemnify any member, officer, employee, or
agent who was or is a party or is threatened to be made a party to any
threatened, pending, or completed action, suit, or proceeding, whether
civil, criminal, administrative, or investigative, by reason of the fact
that he or she was a member, officer, employee, or agent of the
Authority, against expenses (including attorney's fees, judgments,
fines, and amounts paid in settlement actually and reasonably incurred
by him or her in connection with the action, suit, or proceeding) if he
or she acted in good faith and in a manner that he or she reasonably
believed to be in or not opposed to the best interests of the Authority
and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his or her conduct was unlawful. The
termination of any action, suit, or proceeding by judgment, order,
settlement, or conviction or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the person
did not act in good faith in a manner that he or she reasonably believed
to be in or not opposed to the best interest of the Authority and, with
respect to any criminal action or proceeding, had reasonable cause to
believe that his or her conduct was unlawful.
To the extent that a member, officer, employee, or agent of the
Authority has been successful, on the merits or otherwise, in the
defense of any such action, suit, or proceeding referred to in this
subsection (b) or in defense of any claim, issue, or matter therein, he
or she shall be indemnified against expenses, including attorney's fees,
actually and reasonably incurred by him or her in connection therewith.
Any such indemnification shall be made by the Authority only as
authorized in the specific case, upon a determination that
indemnification of the member, officer, employee, or agent is proper in
the circumstances because he or she has met the applicable standard of
conduct. The determination shall be made (i) by the Authority by a
majority vote of a quorum consisting of members who are not parties to
the action, suit, or proceeding or (ii) if such a quorum is not
obtainable or, even if obtainable, a quorum of disinterested members so
directs, by independent legal counsel in a written opinion.
Reasonable expenses incurred in defending an action, suit, or
proceeding shall be paid by the Authority in advance of the final
disposition of the action, suit, or proceeding, as authorized by the
Authority in the specific case, upon receipt of an undertaking by or on
behalf of the member, officer, employee, or agent to repay the amount,
unless it is ultimately determined that he or she is entitled to be
indemnified by the Authority as authorized in this Section.
Any member, officer, employee, or agent against whom any action,
suit, or proceeding is brought may employ his or her own attorney to
appear on his or her behalf.
The right to indemnification accorded by this Section shall not
limit any other right to indemnification to which the member, officer,
employee, or agent may be entitled. Any rights under this Section shall
inure to the benefit of the heirs, executors, and administrators of any
member, officer, employee, or agent of the Authority.
The Authority may purchase and maintain insurance on behalf of any
person who is or was a member, officer, employee, or agent of the
Authority against any liability asserted against him or her and incurred
by him or her in any such capacity or arising out of his or her status
as such, whether or not the Authority would have the power to indemnify
him or her against the liability under the provisions of this Section.
The Authority shall be considered a State agency for purposes of
receiving representation by the Attorney General. Members, officers,
employees, and agents of the Authority shall be entitled to
representation and indemnification under the State Employee
Indemnification Act.
(Source: P.A. 92-547, eff. 6-13-02.)