Sec. 3-21. Bond limitation.
Sec. 3-21. Bond limitation. (a) No bonds, notes or other evidences of indebtedness
for borrowed money payable from General Fund tax receipts of the state shall be authorized by the General Assembly or issued except such as shall not cause the aggregate
amount of the total amount of bonds, notes or other evidences of indebtedness payable
from General Fund tax receipts authorized by the General Assembly but which have
not been issued and the total amount of such indebtedness which has been issued and
remains outstanding to exceed one and six-tenths times the total General Fund tax receipts of the state for the fiscal year in which any such authorization will become effective or in which such indebtedness is issued, as estimated for such fiscal year by the joint
standing committee of the General Assembly having cognizance of finance, revenue
and bonding in accordance with section 2-35. In computing such aggregate amount of
indebtedness at any time, there shall be excluded or deducted, as the case may be, (1)
the principal amount of all such obligations as may be certified by the Treasurer (A) as
issued in anticipation of revenues to be received by the state during the period of twelve
calendar months next following their issuance and to be paid by application of such
revenue, or (B) as having been refunded or replaced by other indebtedness the proceeds
and projected earnings on which or other funds are held in escrow to pay and are sufficient to pay the principal, interest and any redemption premium until maturity or earlier
planned redemption of such indebtedness, or (C) as issued and outstanding in anticipation of particular bonds then unissued but fully authorized to be issued in the manner
provided by law for such authorization, provided, as long as any of such obligations are
outstanding, the entire principal amount of such particular bonds thus authorized shall
be deemed to be outstanding and be included in such aggregate amount of indebtedness,
or (D) as payable solely from revenues of particular public improvements, (2) the amount
which may be certified by the Treasurer as the aggregate value of cash and securities in
debt retirement funds of the state to be used to meet principal of outstanding obligations
included in such aggregate amount of indebtedness, (3) every such amount as may be
certified by the Secretary of the Office of Policy and Management as the estimated
payments on account of the costs of any public work or improvement thereafter to be
received by the state from the United States or agencies thereof and to be used, in
conformity with applicable federal law, to meet principal of obligations included in such
aggregate amount of indebtedness, (4) all authorized and issued indebtedness to fund
any budget deficits of the state for any fiscal year ending on or before June 30, 1991,
(5) all authorized indebtedness to fund the program created pursuant to section 32-285,
(6) all authorized and issued indebtedness to fund any budget deficits of the state for
any fiscal year ending on or before June 30, 2002, (7) all indebtedness authorized and
issued pursuant to section 1 of public act 03-1 of the September 8 special session*, (8)
all authorized indebtedness issued pursuant to section 3-62h, and (9) any indebtedness
represented by any agreement entered into pursuant to subsection (b) or (c) of section
3-20a as certified by the Treasurer, provided the indebtedness in connection with which
such agreements were entered into shall be included in such aggregate amount of indebtedness. In computing the amount of outstanding indebtedness, only the accreted value
of any capital appreciation obligation or any zero coupon obligation which has accreted
and been added to the stated initial value of such obligation as of the date of any computation shall be included.
(b) The foregoing limitation on the aggregate amount of indebtedness of the state
shall not prevent the issuance of (1) obligations to refund or replace any such indebtedness existing at any time in an amount not exceeding such existing indebtedness, or (2)
obligations in anticipation of revenues to be received by the state during the period of
twelve calendar months next following their issuance, or (3) obligations payable solely
from revenues of particular public improvements.
(c) For the purposes of this section, but subject to the exclusions or deductions
herein provided for, the state shall be deemed to be indebted upon, and to issue, all
bonds and notes issued or guaranteed by it and payable from General Fund tax receipts.
To the extent necessary because of the debt limitation herein provided, priorities with
respect to the issuance or guaranteeing of bonds or notes by the state shall be determined
by the State Bond Commission.
(d) The General Assembly shall not approve any bill which authorizes the issuance
of any bonds, notes or other evidences of indebtedness unless such bill has attached to
it a certification by the Treasurer that the amount of authorizations within the bill will
not cause the total amount of indebtedness calculated in accordance with this section
to exceed the limit for indebtedness set forth in this section.
(e) The State Bond Commission shall not adopt any resolution which authorizes
the issuance of any bonds, notes or other evidences of indebtedness unless such resolution has attached to it a certification by the Treasurer that the amount of such authorization will not cause the total amount of indebtedness calculated in accordance with this
section to exceed the limit for indebtedness set forth in this section.
(f) The provisions of this section shall not apply to any bonds, notes or other evidences of indebtedness for borrowed money which are issued for the purpose of: (1)
Meeting cash flow needs; or (2) covering emergency needs in times of natural disaster.
(1957, P.A. 640; 1959, P.A. 132, S. 14; P.A. 77-614, S. 19, 610; P.A. 78-366, S. 2, 4; June Sp. Sess. P.A. 91-3, S. 129,
168; P.A. 92-236, S. 47, 48; P.A. 98-124, S. 4, 12; May 9 Sp. Sess. P.A. 02-5, S. 25; P.A. 04-3, S. 8; 04-216, S. 62; P.A.
06-196, S. 24.)
*Note: Section 1 of public act 03-1 of the September 8 special session is special in nature and therefore has not been
codified but remains in full force and effect according to its terms.
History: 1959 act substituted reference to "bonds, notes or other evidences of indebtedness" from references to term
"indebtedness"; in Subsec. (a), specified that fiscal year as to which limitation applies be that which ended not less than
three nor more than 15 months prior to issuance, provided, in Subdivs. (1) and (2) that indebtedness be certified by treasurer,
deleted requirement in Subdiv. (2) that cash and security be "required by agreement of the state with its creditors" to be
so used, and added Subdiv. (1)(D) and Subdiv. (3); changed technical language of Subparas. (A) to (C) of Subsec. (a)(1),
of Subsec. (a)(2) and of Subsec. (c); and added Subsec. (b); P.A. 77-614 substituted secretary of the office of policy and
management for commissioner of finance and control; P.A. 78-366 specified general fund tax receipts as determinator of
bond limitation; June Sp. Sess. P.A. 91-3 amended Subsec. (a) to reduce the multiplier from four and one-half times tax
receipts to one and six-tenths times, to change the basis from debt issued to debt authorized by the general assembly, to
change the measure of such receipts from actual receipts from a prior year to the current estimates under Sec. 2-35, to add
Subdiv. (4) to exclude debt for budget deficits prior to July 1, 1991, and to set a valuation method for capital appreciation
obligations and zero coupon obligations, amended Subsecs. (a) and (c) to clarify that the section is applicable only to
obligations payable from general fund receipts, and added Subsecs. (d), limiting authorizations of the general assembly,
(e), limiting authorizations of the state bond commission, and (f), exempting obligations issued for cash flow needs or
emergency needs in times of natural disaster; P.A. 92-236 added Subsec. (a)(5) excluding indebtedness to fund program
created pursuant to Sec. 32-285; P.A. 98-124 added Subdiv. (6) re agreements pursuant to Sec. 3-20a(b) or (c) and made
technical changes, effective May 27, 1998; May 9 Sp. Sess. P.A. 02-5 made technical changes and added provision excluding
deficit funding bonds for the fiscal year ending June 30, 2002, from the limitations of section, effective August 15, 2002;
P.A. 04-3 amended Subsec. (a) to add exclusion for certain deficit-financing notes issued for 2003 fiscal year, effective
March 11, 2004; P.A. 04-216 amended Subsec. (a) to exempt abandoned property fund bonds from the bond cap, effective
May 6, 2004; P.A. 06-196 made technical changes in Subsec. (a), effective June 7, 2006.