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New Law Extends
Period for Issuance of Bonds After Referendum During Lawsuit
The Local Government
Debt Reform Act provides that whenever bonds are required to be authorized
by a referendum, the approval remains in effect for five (5) years after the
date of the referendum (this limit is three (3) years in the case of a backdoor
referendum). Public Act 96-0826 (eff.
Nov. 25, 2009) adds an exception to this provision so that whenever bonds are
not issued because of a court action, the 5-year and 3-year periods are tolled
during the pendency of the court action. This exception will prevent the expiration of referendum authority
during drawn-out legal battles challenging either a bond issue itself or other
action related to an issue or its underlying project. The law was intended to address a situation
in which the Village
of Rockton had secured
referendum approval for bonds in 2005 but cannot issue the bonds due to a
pending court case challenging the validity of the referendum.
Please contact Heather Brickman or Steve
Richart for further information about this law or other finance questions.
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