SB2177 Summary: Individual Income Tax Bond Act

• Authorizes Illinois to issue $6 billion in limited obligation bonds to provide financial relief to state vendors by paying outstanding invoices due for goods and services.

• Bonds must mature within 6 years of issuance and are payable only from pledged income tax revenues deposited into the Individual Income Tax Bond Fund, not from general state revenues or full faith and credit.

• Creates the Individual Income Tax Bond Fund and Individual Income Tax Bond Retirement and Interest Fund; requires 60% of individual income tax receipts (after other allocations) be deposited into the bond fund to pay principal, interest, and debt service.

• Establishes oversight requirements including cost of issuance disclosure (within 20 business days of bond issuance) to legislative leaders and the Commission on Government Forecasting and Accountability, with limits on underwriter fees and prohibition on contingent fee arrangements.

• Bonds must be issued by December 31, 2017, and allows refunding bonds only if net present value savings are at least 3% of the refunding bond principal amount.