Illinois Compiled Statutes
Chapter 50 - LOCAL GOVERNMENT
50 ILCS 320/ - Local Government Financial Planning and Supervision Act.

(50 ILCS 320/1) (from Ch. 85, par. 7201)
Sec. 1.
Short title.
This Act may be cited as the Local Government Financial Planning and Supervision Act.

(Source: P.A. 86-1211.)
 
(50 ILCS 320/2) (from Ch. 85, par. 7202)
Sec. 2.
Policy and purpose.
(a) It is the public policy of this State, in order to
provide for the public health, safety and welfare, to provide assistance to
units of local government in the formulation and implementation of proper
financial accounting procedures, budgeting and taxing practices.
(b) The purpose of this Act is to assure fiscal integrity of all units of
local government so that they may provide for the health, safety and
welfare of their citizens, pay when due principal and interest on their
debt obligations and meet financial obligations to their employees, vendors
and suppliers. The failure of a unit of local government to so act is
hereby determined to affect adversely the health and safety and welfare not
only of the people of the unit of local government, but also of the people
of the State of Illinois.
(c) This Act is an Omnibus Bond Act within the meaning of Section 8 of
the Statute on Statutes. No provision of this Act shall be deemed to apply
if such application shall result in the impairment of a contract made prior
to the effective date of this Act with any person, other than the
governmental entities named in Section 7 of this Act. Any person not such
a governmental entity shall continue to be able to enforce any rights
assigned to or otherwise pledged to or for the benefit of such person by
such entity.

(Source: P.A. 86-1211.)
 
(50 ILCS 320/3) (from Ch. 85, par. 7203)
Sec. 3.
Definitions.
As used in this Act, unless the context requires
otherwise:
(a) "Commission" means a financial planning and supervision commission
created pursuant to this Act.
(b) "Fiscal emergency" means the existence of any one or more of the
following conditions:
(c) "Governing body" means the board or other body of officers having
authority to levy taxes, make appropriations, authorize the expenditure of
public funds or approve claims for any unit of local government.
(d) "Unit of local government" shall have the meaning provided as specified
in Article VII, Section 1 of the Illinois Constitution, and further means
only those units of local government which have a population under 25,000.

(Source: P.A. 86-1211.)
 
(50 ILCS 320/4) (from Ch. 85, par. 7204)
Sec. 4.
Petition.
(a) This subsection (a) applies through December 31, 1992. Any unit of
local government upon a 2/3 vote of the members of its governing body may
petition the Governor for the establishment of a financial planning and
supervision commission if the governing body of the unit of local
government determines that a fiscal emergency, as defined in Section 3,
exists or will exist within 60 days. A copy of the petition shall be filed
with the Illinois Finance Authority requesting the
assistance
of the Authority in conducting an analysis of the financial condition of
the unit of local government. A petition shall include the conditions of
fiscal emergency, a list of all amounts and types of indebtedness or claims
known to the unit of local government, and which creditors are subject to
the stay provisions of Section 7 of this Act.
(b) This subsection (b) applies on and after January 1, 1993.
Any unit of local government upon a 2/3 vote of the members of its
governing body may petition the Governor for the establishment of a
financial planning and supervision commission if the governing body of the
unit of local government determines that a fiscal emergency, as defined in
Section 3, exists or will exist within 60 days. A petition shall include
the conditions of fiscal emergency and a list of all creditors of the unit
of local government, which list shall indicate the names, addresses,
amounts and types of indebtedness or claims of such creditors, and which of
such creditors are subject to the stay provisions of Section 7 of this Act.

(Source: P.A. 93-205, eff. 1-1-04.)
 
(50 ILCS 320/5) (from Ch. 85, par. 7205)
Sec. 5. Establishment of commission.
(a) This subsection (a) applies through December 31, 1992.
(b) This subsection (b) applies on and after January 1, 1993.
(Source: P.A. 93-205, eff. 1-1-04; 94-793, eff. 5-19-06.)
 
(50 ILCS 320/6) (from Ch. 85, par. 7206)
Sec. 6.
Action by commission; financial advisor; liability.
(a) The commission may adopt and alter bylaws and rules for
the conduct of its affairs, and for the manner, subject to this Act, in
which its powers and functions shall be exercised and embodied.
(b) Six members of the commission constitute a quorum of the commission.
The affirmative vote of 6 members of the commission is necessary for any
action taken by vote of the commission. No vacancy in the membership of
the commission shall impair the rights of a quorum by such vote to exercise
all the rights and perform all the duties of the commission. Members of
the commission, and their designees, are not disqualified from voting by
reason of the functions of the other office they hold and are not
disqualified from exercising the functions of any other office with respect
to the unit of local government, its officers, or the commission.
(c) The commission may retain a financial advisor. As used in this
Act, "financial advisor" means a firm of certified public accountants
with demonstrated professional competence in matters relating to this Act,
engaged by the commission pursuant to a written contract, a copy of which
shall be provided to each member of the commission and each member of the
governing body of the unit of local government.
(d) The financial advisor, the members of the commission, or any other
person authorized to act on behalf of or assist them shall not be
personally liable or subject to any action, judgment, or claim for damages
resulting from the exercise of or failure to exercise the powers, duties,
and functions granted to them in regard to their functioning under this
Act, but the commission, the financial advisor, and such other persons
shall be subject to mandamus proceedings to compel performance of their
duties under this Act.
(e) At the request of the commission the administrative head of any State
department or agency shall temporarily assign personnel skilled in
procedures relevant to assisting the commission or the financial advisor
in its duties.
(f) Each appointed member of the commission shall file with the
commission a signed written statement setting forth the general nature of
sales of goods, property, or services or of loans to the unit of local
government with respect to which that commission is established, in which
such member has a pecuniary interest or in which any member of his
immediate family, or any corporation, partnership, or enterprise of which
he is an officer, director, or partner, or of which he or a member of his
immediate family owns more than 7 1/2% interest, has a pecuniary interest,
and of which sale, loan and interest such member has knowledge. The
statement shall be supplemented from time to time to reflect changes in the
general nature of any such sales or loans.

(Source: P.A. 86-1211.)
 
(50 ILCS 320/7) (from Ch. 85, par. 7207)
Sec. 7.
Judgment or lien; indebtedness.
(a) No State agency, board, commission or department, no subdivision of
the State, and no unit of local government (including municipalities or
counties having a population of 25,000 or more, and all of the foregoing
being the "stayed creditors") may enforce any judgment or lien against, or
take any other action to collect any indebtedness, obligations or
liabilities from, a unit of local government covered by this Act during the
period provided in this Section. This prohibition of enforcement or action
is hereafter referred to as the "stay". The period of the stay shall begin
at the time of the determination of fiscal emergency by the Governor and
end at the earlier of (1) the time of reversal of such determination by a
court, (2) 2 years after the stay begins, or (3) when the commission
dissolves pursuant to Section 12 of this Act. The 2 year stay so provided
may be extended for an additional one year by the commission with the
consent of the majority (by number and by dollar amounts) of the stayed
creditors affected by the stay. The commission may upon application or
upon its own initiative grant exceptions to the stay provisions of this
Section as adequate protection of creditors' interests and equity may
require. Any such decision shall be a final administrative decision
subject to the provisions of the Administrative Review Law. The stay does
not discharge the unit of local government from its indebtedness,
obligations or liabilities.
(b) Notwithstanding subsection (a), any indebtedness, obligation or
liability incurred by a unit of local government after the beginning of the
period of the stay shall not be subject to that stay.

(Source: P.A. 86-1211.)
 
(50 ILCS 320/8) (from Ch. 85, par. 7208)
Sec. 8.
Financial plan.
(a) Within 120 days after the first meeting of the commission, the
presiding officer of the governing body of the unit of local government, in
conjunction with the financial advisor provided by the commission, shall
submit to the commission a detailed financial plan, as approved or amended
by ordinance or resolution of the governing body, containing the following:
(b) The financial plan developed pursuant to subsection (a) of this
Section shall be filed with the financial advisor and the financial
planning and supervision commission. After consultation with the financial
advisor, and upon completing the procedures and findings required by
subsection (c) of this Section, the commission shall either approve or
reject any initial or subsequent financial plan. If the commission rejects
the initial or any subsequent financial plan, it shall forthwith inform the
governing body of the unit of local government of the reasons for its
rejection. Within 30 days after the rejection of any plan, the presiding
officer, with the approval of the governing body by the passage of an
ordinance or resolution, shall submit another plan meeting the requirements
of this Section to the commission and the financial advisor for approval or
rejection by the commission.
(c) Prior to the approval of any initial or subsequent financial plan, the
commission shall give reasonable notice and opportunity for a hearing to
all creditors of the unit of local government. Any initial or subsequent
financial plan passed by the unit of local government shall be approved by
the commission if it complies with the requirements of this Section, and if
the commission finds that (1) the plan is bona fide and can reasonably be
expected to be implemented within the period specified in the plan, (2) the
plan is a good faith plan reasonably anticipated to alleviate the fiscal
emergency of the unit of local government and (3) the plan is in the best
interest of the unit of local government and its creditors.
(d) The determination of the commission under this Section to approve or
deny approval of the financial plan shall be a final administrative
decision subject to the provisions of the Administrative Review Law.
(e) Any financial plan may be amended subsequent to its adoption in the
same manner as the passage and approval of the initial or subsequent plan
pursuant to this Section.

(Source: P.A. 86-1211.)
 
(50 ILCS 320/9) (from Ch. 85, par. 7209)
Sec. 9.
Powers of commission and financial advisor.
(a) The financial planning and supervision commission, or when
authorized by the commission, the financial advisor, shall have the
following powers, duties and functions:
(b) In the event that the financial planning and supervision commission
determines that the proposed budget, tax levy, bond or note issuance or
revenue estimates do not comply with the financial plan of the unit of
local government, the financial planning and supervision commission shall
be authorized to:
(c) The governing body of the unit of local government and the officers
and employees of any other governmental unit in this State are authorized
and directed to diligently and promptly assist the financial planning and
supervision commission in the prosecution of its duties, including the
furnishing of any and all materials, including justification documents, as
may be required.
(d) Annually on or before the first day of April during the fiscal
emergency period, the commission shall make reports and recommendations to
the General Assembly concerning progress of the unit of local government in
eliminating fiscal emergency conditions, failures of the unit of local
government to comply with this Act, and recommendations for further actions
to attain the objectives of this Act, including legislative action to make
provisions of law more effective for their purposes or to enhance revenue
raising or financing capabilities of the local governmental unit. The
commission may make such interim reports as it may determine to be
appropriate for such purposes and shall make such additional reports as may
be requested by resolution of either house of the General Assembly.

(Source: P.A. 86-1211.)
 
(50 ILCS 320/10) (from Ch. 85, par. 7210)
Sec. 10.
State aid.
(a) This subsection (a) applies through December 31, 1992.
(b) This subsection (b) applies on and after January 1, 1993. During
the period of time that a unit of local government is covered by this Act,
the State shall not be required to distribute to the unit of local
government any monies to which the unit of local government might otherwise
be entitled.

(Source: P.A. 93-205, eff. 1-1-04.)
 
(50 ILCS 320/11) (from Ch. 85, par. 7211)
Sec. 11.
Expenses of commission members.
The members of the financial
planning and supervision commission shall serve without compensation, but
shall be paid by the commission their necessary and actual expenses
incurred while engaged in the business of the commission.

(Source: P.A. 86-1211.)
 
(50 ILCS 320/12) (from Ch. 85, par. 7212)
Sec. 12. Expenses incurred by commission. Any expense or obligation
incurred by the financial planning and supervision commission under this
Act shall be payable solely from appropriations made for that purpose by the
General Assembly.
The commission is authorized to maintain monies appropriated for its use
in a local account for such purposes to be held outside the State Treasury.
Disbursements from this account shall require the approval and signatures
of the chairman of the commission and the treasurer of the commission.
The commission shall be authorized to request the State Comptroller and
State Treasurer to issue State warrants against appropriations made for its
use, in anticipation of commission expenses, for deposit into the local
account.
The compensation and expenses of a financial advisor retained by the
commission shall be paid from monies appropriated to the Department of
Commerce and Economic Opportunity for that purpose. Those appropriations
shall only be committed, obligated, and expended by the Department of
Commerce and Economic Opportunity as the result of an order signed by the
chairman of the commission identifying the selected "financial advisor"
pursuant to subsection (c) of Section 6 of this Act and stating the maximum
compensation awarded to the financial advisor under the contract. A copy
of the order shall be filed with the State Comptroller prior to any
disbursement of funds.

(Source: P.A. 94-793, eff. 5-19-06.)
 
(50 ILCS 320/13) (from Ch. 85, par. 7213)
Sec. 13.
Termination of commission.
(a) A financial planning and supervision commission with
respect to a unit of local government, and its functions under this Act,
shall continue in existence until such time as a determination is made
pursuant to subsection (b) of this Section that each of the following exists:
(b) The determination that all of such conditions for the termination of
the existence of the commission and its functions exist shall be made by
the commission and shall be certified to the General Assembly and the
governing body of the unit of local government.
(c) The commission shall prepare and submit with such certification a
final report of its activities, in such form as is appropriate for the
purpose of providing a record of its activities and assisting other
commissions created under this Act in the conduct of their functions. All
of the books and records of the commission shall be delivered to the
State Comptroller for retention and safekeeping.
(d) Upon termination of the commission, all moneys of the commission
still remaining in the possession of the commission shall be paid to the
State Treasurer and held in a separate fund for the payment and
satisfaction of all remaining obligations of the commission. Any excess
shall be paid over to the General Revenue Fund.
(e) If, at the time of termination of the commission, an effective
financial accounting and reporting system has not been fully implemented,
the Governor shall monitor the progress of implementation and shall
exercise his authority to secure full implementation at the earliest time
feasible but within 2 years from such termination.

(Source: P.A. 86-1211.)
 
(50 ILCS 320/14) (from Ch. 85, par. 7214)
Sec. 14.
Application of Act.
A unit of local government may by
contract declare that the provisions of this Act shall not apply to any
indebtedness, obligation or liability incurred under such contract.

(Source: P.A. 86-1211.)

Structure Illinois Compiled Statutes