SB2218 - Individual Income Tax Bond Act

• Authorizes Illinois to issue up to $6 billion in limited obligation bonds, with all proceeds issued by December 31, 2017, to provide financial relief to state vendors by paying outstanding invoices.

• Creates two new funds: the Individual Income Tax Bond Proceeds Fund (to receive bond proceeds for vendor payments) and the Individual Income Tax Bond Retirement and Interest Fund (to pay principal and interest on bonds).

• Requires 60% of individual income tax revenue (after other required transfers) to be deposited into a new Individual Income Tax Bond Fund to secure the bonds and ensure debt service payments.

• Bonds are limited obligations secured only by pledged income tax revenues, not the full faith and credit of the State, and may mature up to 8 years from issuance with variable or fixed interest rates.

• Mandates monthly transfers from the Individual Income Tax Bond Fund to the Retirement and Interest Fund equal to 1/12th of 125% of annual debt service requirements, with surplus revenues transferred to the General Revenue Fund after bond service is covered.