SPRINGFIELD – A bill aimed to end “abuses” of alternate revenue bonds passed the House by a wide margin this week.
House Bill 983, sponsored by David McSweeney, R-Barrington Hills, and Jack Franks, D-Marengo, was introduced after McHenry County College officials said they could issue alternate revenue bonds for a proposed expansion.
The college also could consider public-private partnerships and issuing debt certificates to pay for a proposed expansion of its health and wellness programs.
Alternate revenue bonds – known to municipal lenders as double-barreled bonds – allow taxing bodies to issue debt without voter approval.
The loan most often is repaid by an identified revenue stream tied to the project.
But if revenue projections don’t add up, the taxpayers repay the debt by way of a property-tax increase.
Lakewood issued alternate revenue bonds to buy RedTail Golf Course, and for years residents repaid the loan when the golf course couldn’t cover the debt.
“I just want to give the taxpayers the ability to have a say on the issuance of these bonds,” McSweeney said. “They’ve been abused in the past. We saw what happened in Lakewood, and I just want to protect the taxpayers.”
The bill tightens regulations in the Debt Reform Act, by dropping the number of signatures required to get these bond issuances onto a ballot, and expands the number of days one has to do so.
Citizens would have 45 days to collect the necessary signatures, up from 30 days. In McHenry County, it would require signatures from 5,000 registered voters, down from about 15,000 signatures previously.
The bill was passed Tuesday, 101-6, and now moves to the State Senate.