(30 ILCS 440/1) Sec. 1. Short title. This Act may be cited as the Illinois Unemployment Insurance Trust Fund Financing Act. (Source: P.A. 93-634, eff. 1-1-04.)

(30 ILCS 440/2) Sec. 2. Findings and Declaration of Policy. It is hereby found and declared that: A. It is an essential governmental function to

maintain funds in an amount sufficient to pay unemployment benefits when due;

B. At the time of the enactment of this Act,

unemployment benefits payments are made from Illinois' account in the Unemployment Trust Fund of the United States Treasury and are funded by employer contributions;

C. At the time of the enactment of this Act,

borrowing from the Federal government is the only option available to obtain sufficient funds to pay benefits when the balance in Illinois' account in the Unemployment Trust Fund of the United States Treasury is insufficient to make necessary payments;

D. Alternative methods of replenishing Illinois'

account in the Unemployment Trust Fund of the United States Treasury may reduce the costs of providing unemployment benefits and employers' cost of doing business in the State;

E. It is in the State's best interests to authorize

the issuance of bonds when appropriate for the purpose of continuing the unemployment insurance program at the lowest possible cost to the State and employers in Illinois; and

F. It is the public policy of this State to promote

and encourage the full participation of female- and minority-owned firms with regard to bonds issued by State departments, agencies, and authorities. The Director shall, therefore, ensure that the process for procuring contracts with regard to Bonds includes outreach to female- and minority-owned firms and gives due consideration to those firms in the selection and approval of any contracts with any parties necessary to issue Bonds.

(Source: P.A. 93-634, eff. 1-1-04.)

(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, 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 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 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 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 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. 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. 97-621, eff. 11-18-11.)

(30 ILCS 440/4) Sec. 4. Authority to Issue Revenue Bonds. A. The Department shall have the continuing power to borrow money for the purpose of carrying out the following: 1. To reduce or avoid the need to borrow or obtain a

federal advance under Section 1201, et seq., of the Social Security Act (42 U.S.C. Section 1321), as amended, or any similar federal law; or

2. To refinance a previous advance received by the

Department with respect to the payment of Benefits; or

3. To refinance, purchase, redeem, refund, advance

refund or defease (including, any combination of the foregoing) any outstanding Bonds issued pursuant to this Act; or

4. To fund a surplus in Illinois' account in the

Unemployment Trust Fund of the United States Treasury.

Paragraphs 1, 2 and 4 are inoperative on and after January 1, 2022. B. As evidence of the obligation of the Department to repay money borrowed for the purposes set forth in Section 4A above, the Department may issue and dispose of its interest bearing revenue Bonds and may also, from time-to-time, issue and dispose of its interest bearing revenue Bonds to purchase, redeem, refund, advance refund or defease (including, any combination of the foregoing) any Bonds at maturity or pursuant to redemption provisions or at any time before maturity. The Director, in consultation with the Department's Employment Security Advisory Board, shall have the power to direct that the Bonds be issued. Bonds may be issued in one or more series and under terms and conditions as needed in furtherance of the purposes of this Act. The Illinois Finance Authority shall provide any technical, legal, or administrative services if and when requested by the Director and the Employment Security Advisory Board with regard to the issuance of Bonds. The Governor's Office of Management and Budget may, upon the written request of the Director, issue the bonds authorized pursuant to this Act on behalf of the Department and, for that purpose, may retain such underwriters, financial advisors, and counsel as may be appropriate from the Office's then-existing roster of prequalified vendors. Such Bonds shall be issued in the name of the State of Illinois for the benefit of the Department and shall be executed by the Director. In case any Director whose signature appears on any Bond ceases (after attaching his or her signature) to hold that office, her or his signature shall nevertheless be valid and effective for all purposes. C. No Bonds shall be issued without the Director's written certification that, based upon a reasonable financial analysis, the issuance of Bonds is reasonably expected to: (i) Result in a savings to the State as compared to

the cost of borrowing or obtaining an advance under Section 1201, et seq., Social Security Act (42 U.S.C. Section 1321), as amended, or any similar federal law;

(ii) Result in terms which are advantageous to the

State through refunding, advance refunding or other similar restructuring of outstanding Bonds;

(iii) Allow the State to avoid an anticipated

deficiency in the State's account in the Unemployment Trust Fund of the United States Treasury by funding a surplus in the State's account in the Unemployment Trust Fund of the United States Treasury; or

(iv) Prevent the reduction of the employer credit

provided under Section 3302 of the Federal Unemployment Tax Act with respect to employers subject to the Unemployment Insurance Act.

D. All such Bonds shall be payable from Fund Building Receipts. Bonds may also be paid from (i) to the extent allowable by law, from monies in the State's account in the Unemployment Trust Fund of the United States Treasury; and (ii) to the extent allowable by law, a federal advance under Section 1201, et seq., of the Social Security Act (42 U.S.C. Section 1321); and (iii) proceeds of Bonds and receipts from related credit and exchange agreements to the extent allowed by this Act and applicable legal requirements. E. The maximum principal amount of the Bonds, when combined with the outstanding principal of all other Bonds issued pursuant to this Act, shall not at any time exceed $2,400,000,000, excluding all of the outstanding principal of any other Bonds issued pursuant to this Act for which payment has been irrevocably provided by refunding or other manner of defeasance. It is the intent of this Act that the outstanding Bond authorization limits provided for in this Section 4E shall be revolving in nature, such that the amount of Bonds outstanding that are not refunded or otherwise defeased shall be included in determining the maximum amount of Bonds authorized to be issued pursuant to the Act. F. Such Bonds and refunding Bonds issued pursuant to this Act may bear such date or dates, may mature at such time or times not exceeding 10 years from their respective dates of issuance, and may bear interest at such rate or rates not exceeding the maximum rate authorized by the Bond Authorization Act, as amended and in effect at the time of the issuance of the Bonds. G. The Department may enter into a Credit Agreement pertaining to the issuance of the Bonds, upon terms which are not inconsistent with this Act and any other laws, provided that the term of such Credit Agreement shall not exceed the term of the Bonds, plus any time period necessary to cure any defaults under such Credit Agreement. H. Interest earnings paid to holders of the Bonds shall not be exempt from income taxes imposed by the State. I. While any Bond Obligations are outstanding or anticipated to come due as a result of Bonds expected to be issued in either or both of the 2 immediately succeeding calendar quarters, the Department shall collect and deposit Fund Building Receipts into the Master Bond Fund in an amount necessary to satisfy the Required Fund Building Receipts Amount prior to expending Fund Building Receipts for any other purpose. The Required Fund Building Receipts Amount shall be that amount necessary to ensure the marketability of the Bonds, which shall be specified in the Bond Sale Order executed by the Director in connection with the issuance of the Bonds. J. Holders of the Bonds shall have a first and priority claim on all Fund Building Receipts in the Master Bond Fund in parity with all other holders of the Bonds, provided that such claim may be subordinated to the provider of any Credit Agreement for any of the Bonds. K. To the extent that Fund Building Receipts in the Master Bond Fund are not otherwise needed to satisfy the requirements of this Act and the instruments authorizing the issuance of the Bonds, such monies shall be used by the Department, in such amounts as determined by the Director to do any one or a combination of the following: 1. To purchase, refinance, redeem, refund, advance

refund or defease (or any combination of the foregoing) outstanding Bonds, to the extent such action is legally available and does not impair the tax exempt status of any of the Bonds which are, in fact, exempt from Federal income taxation; or

2. As a deposit in the State's account in the

Unemployment Trust Fund of the United States Treasury; or

3. As a deposit into the Special Programs Fund

provided for under Section 2107 of the Unemployment Insurance Act.

L. The Director shall determine the method of sale, type of bond, bond form, redemption provisions and other terms of the Bonds that, in the Director's judgment, best achieve the purposes of this Act and effect the borrowing at the lowest practicable cost, provided that those determinations are not inconsistent with this Act or other applicable legal requirements. Those determinations shall be set forth in a document entitled "Bond Sale Order" acceptable, in form and substance, to the attorney or attorneys acting as bond counsel for the Bonds in connection with the rendering of opinions necessary for the issuance of the Bonds and executed by the Director. (Source: P.A. 96-30, eff. 6-30-09; 97-621, eff. 11-18-11.)

(30 ILCS 440/5) Sec. 5. Bond Proceeds. A. The proceeds of any Bonds issued pursuant to this Act, including investment income thereon, shall be held in trust in the Master Bond Fund for the following purpose and in such amounts as determined by the Director: 1. Paying the principal and interest on any

outstanding federal advance received by the Department under Section 1201, et seq., of the Social Security Act (42 U.S.C. Section 1321), as amended, or any similar federal law;

2. Being deposited into the State's account in the

Unemployment Trust Fund of the United States Treasury for the purpose of: (i) avoiding anticipated deficiencies in that account or (ii) funding a surplus in that account, when doing either (i) or (ii) will result in a savings to the State or employers or both;

3. Paying the costs of issuing or refinancing any

such Bonds;

4. Providing an appropriate reserve for any such

Bonds to the extent that the Department determines that an appropriate reserve is warranted; and

5. Paying capitalized interest on the Bonds for the

period determined necessary by the Department, not to exceed 2 years.

B. Excess Bond proceeds remaining available after the payments and deposits required pursuant to Section 5A1 through 5A5 above have been made, may be used in the following manner as determined by the Director: 1. To purchase, redeem or defease outstanding Bonds,

to the extent such action is legally available and does not impair the tax-exempt status of any of the Bonds which are, in fact, tax-exempt; or

2. To pay any scheduled interest payment or payments

due on any outstanding Bonds; or

3. Deposited in the State's account in the

Unemployment Trust Fund of the United States Treasury.

(Source: P.A. 93-634, eff. 1-1-04.)

(30 ILCS 440/6) Sec. 6. Bonds Not A Pledge of the State. A. Any Bonds issued under this Act, and any related Credit Agreement, are not a pledge of the faith and credit or moral obligation of the State or any State agency or political subdivision of the State. All Bonds, Bond Obligations and payment obligations deriving from any Credit Agreement are payable solely as provided in Section 4D. B. Any Bonds and any related Credit Agreement issued under this Act must contain a conspicuous statement to the effect that: 1. Neither the State, nor any State agency, political

corporation, or political subdivision of the State, is obligated to pay the principal of or interest on the Bonds except as provided by this Act; and

2. Neither the faith and credit of the State or any

State agency, political corporation, or political subdivision of the State, nor the moral obligation of any of them, is pledged to the payment of the principal of or interest on the Bonds.

(Source: P.A. 93-634, eff. 1-1-04.)

(30 ILCS 440/7) Sec. 7. State Not to Impair Bond Obligations. While Bonds under this Act are outstanding, the State irrevocably pledges and covenants that it shall not: A. Take action to limit or restrict the rights of the Department to fulfill its responsibilities to pay Bond Obligations, Bond Administrative Expenses or otherwise comply with instruments entered by the Department pertaining to the issuance of the Bonds; B. In any way impair the rights and remedies of the holders of the Bonds until the Bonds are fully discharged; or C. Reduce: 1. The Fund Building Rates below the levels in

existence effective January 1, 2012;

2. The maximum amount includable as wages pursuant to

Section 235 of the Unemployment Insurance Act below the levels in existence effective January 1, 2012; and

3. The Solvency Adjustments imposed pursuant to

Section 1400.1 of the Unemployment Insurance Act below the levels in existence effective January 1, 2012.

(Source: P.A. 97-621, eff. 11-18-11.)

(30 ILCS 440/8) Sec. 8. Continuing appropriation. This Act shall constitute an irrevocable and continuing appropriation of all amounts necessary in respect to use of Fund Building Receipts and Bond Proceeds for purposes specified in this Act, including, without limitation, for the provision for payment of principal and interest on the Bonds and other amounts due in connection with the issuance of the Bonds pursuant to this Act, to the fullest extent such appropriation is required. (Source: P.A. 95-331, eff. 8-21-07.)

(30 ILCS 440/9) Sec. 9. Director's Supplemental Authority. The Director, on behalf of the Department, is authorized to enter into the covenants and agreements required by this Act, make any determinations, calculations, rules or other promulgations required by this Act and engage or hire the necessary attorneys, financial advisors, consultants, verification agents, trustees, underwriters, remarketing agents and other professionals necessary to carry out the purposes and intent of this Act, unless otherwise expressly specified or required under this Act. (Source: P.A. 93-634, eff. 1-1-04.)

(30 ILCS 440/10) Sec. 10. No Personal Liability. No director, officer or employee of the Department or the State shall be personally liable as a result of exercising the rights and responsibilities granted under this Act. (Source: P.A. 93-634, eff. 1-1-04.)

(30 ILCS 440/11) Sec. 11. Omnibus Bonds Acts. With respect to instruments for the payment of money issued under this Act, it is and always has been the intention of the General Assembly (i) that the Omnibus Bond Acts are and always have been supplementary grants of power to issue instruments in accordance with the Omnibus Bond Acts, regardless of any provision of this Act that may appear to be or to have been more restrictive than those Omnibus Bond Acts, (ii) that the provisions of this Act are not a limitation on the supplementary authority granted by the Omnibus Bond Acts, and (iii) that instruments issued under this Act within the supplementary authority granted by the Omnibus Bond Acts are not invalid because of any provision of this Act that may appear to be or to have been more restrictive than those Omnibus Bond Acts. (Source: P.A. 93-634, eff. 1-1-04.)

(30 ILCS 440/12) Sec. 12. Mandatory Provisions. The provisions of this Act are mandatory and not directory. (Source: P.A. 93-634, eff. 1-1-04.)

(30 ILCS 440/13) Sec. 13. Severability and inseverability. If any provision of this Act or its application to any person or circumstance is held invalid, the invalidity of that provision or application does not affect other provisions or applications of the Act that can be given effect without the invalid provision or application, except that this Act is inseverable to the extent that if all or any substantial and material part of Sections 1 through 12 are held invalid, then the entire Act (including both new and amendatory provisions) is invalid. (Source: P.A. 93-634, eff. 1-1-04.)

(30 ILCS 440/13.1) Sec. 13.1. (Amendatory provisions; text omitted). (Source: P.A. 93-634, eff. 1-1-04.)

(30 ILCS 440/13.2) Sec. 13.2. (Amendatory provisions; text omitted). (Source: P.A. 93-634, eff. 1-1-04.)

(30 ILCS 440/13.3) Sec. 13.3. (Amendatory provisions; text omitted). (Source: P.A. 93-634, eff. 1-1-04.)

(30 ILCS 440/13.4) Sec. 13.4. The Unemployment Insurance Act is amended by repealing Sections 1506.4 and 2104. (Source: P.A. 93-634, eff. 1-1-04.)

(30 ILCS 440/14) Sec. 14. Effective Date. This Act takes effect on January 1, 2004. (Source: P.A. 93-634, eff. 1-1-04.)