Illinois Compiled Statutes 65 ILCS 5/11-117-9 – For the purpose of acquiring any public utility, or any part thereof, …
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For the purpose of acquiring any public utility, or any part thereof, or property necessary or appropriate for the operation of any public utility, either by purchase, condemnation or construction, any municipality may issue and dispose of interest bearing certificates, hereinafter called public utility certificates. Under no circumstances shall these public utility certificates be or become an obligation or liability of the municipality or payable out of any general fund thereof. They shall be payable solely out of the revenue or income to be derived from the public utility for the acquisition of which they were issued. Such certificates shall not be issued and secured on public utility property in an amount in excess of the cost of the municipality of that property and 10% of that cost in addition thereto.
In order to secure the payment of these public utility certificates and the interest thereon, the municipality may convey, by way of mortgage or deed of trust, any or all of the public utility property acquired or to be acquired through the issuance thereof. Such a mortgage or deed of trust shall be executed in such manner as may be directed by law for the acknowledgment and recording of mortgages of real estate, and may contain such provisions and conditions not in conflict with the provisions of this Division 117 as may be deemed necessary to secure the payment of the public utility certificates described therein. Any such mortgage or deed of trust may grant a privilege or right to maintain and operate the public utility property covered thereby, for a period not exceeding 20 years from and after the date that that property may come into the possession of any person as the result of foreclosure proceedings. Such a privilege or right may include the right to fix the rates or charges which the person securing the property as the result of foreclosure proceedings shall be entitled to charge in the operation of that property for a period not exceeding 20 years.
Whenever and as often as default is made in the payment of any public utility certificate, issued and secured by a specific mortgage or deed of trust, or in the payment of the interest thereon when due, and the default has continued for the space of 12 months after notice thereof has been given to the mayor, and to the comptroller, if any, it is lawful for the mortgagee or trustee, upon the request of the holders of a majority in amount of the certificates issued and outstanding under the mortgage or deed of trust, to declare the whole of the principal of all of the certificates, which are unpaid, to be at once due and payable, and to proceed to foreclose the mortgage or deed of trust in any court of competent jurisdiction. At a foreclosure sale, the mortgagee or the holders of the unpaid certificates may become the purchaser or purchasers of the property, rights and privileges sold, if he or they are the highest bidders. Any public utility acquired under any such foreclosure shall be subject to regulation by the corporate authorities of the municipality to the same extent as if the right to construct, maintain, and operate that property had been acquired through a direct grant without the intervention of foreclosure proceedings.
However, no public utility certificates shall ever be issued by any municipality under the provisions of this Division 117 unless the question of the adoption of the ordinance of the corporate authorities authorizing the issuance thereof has first been submitted to the electors of the municipality and approved by a majority of the electors of the municipality voting upon the question. The question shall be submitted in accordance with the provisions of Section 11-117-3.
In order to secure the payment of these public utility certificates and the interest thereon, the municipality may convey, by way of mortgage or deed of trust, any or all of the public utility property acquired or to be acquired through the issuance thereof. Such a mortgage or deed of trust shall be executed in such manner as may be directed by law for the acknowledgment and recording of mortgages of real estate, and may contain such provisions and conditions not in conflict with the provisions of this Division 117 as may be deemed necessary to secure the payment of the public utility certificates described therein. Any such mortgage or deed of trust may grant a privilege or right to maintain and operate the public utility property covered thereby, for a period not exceeding 20 years from and after the date that that property may come into the possession of any person as the result of foreclosure proceedings. Such a privilege or right may include the right to fix the rates or charges which the person securing the property as the result of foreclosure proceedings shall be entitled to charge in the operation of that property for a period not exceeding 20 years.
Terms Used In Illinois Compiled Statutes 65 ILCS 5/11-117-9
- Deed: The legal instrument used to transfer title in real property from one person to another.
- Foreclosure: A legal process in which property that is collateral or security for a loan may be sold to help repay the loan when the loan is in default. Source: OCC
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- Mortgagee: The person to whom property is mortgaged and who has loaned the money.
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- public utility: when used in this Division 117, means and includes any plant, equipment, or property, and any franchise, license, or permit, used or to be used (1) for or in connection with the transportation of persons or property, or the conveyance of telegraph or telephone messages; or (2) for the production, storage, transmission, sale, delivery, or furnishing of cold, heat, light, power, water, or for the conveyance of oil or gas by pipe lines; or (3) for the storage or warehousing of goods; or (4) for the conduct of the business of a wharfinger. See Illinois Compiled Statutes 65 ILCS 5/11-117-2
- Trustee: A person or institution holding and administering property in trust.
Whenever and as often as default is made in the payment of any public utility certificate, issued and secured by a specific mortgage or deed of trust, or in the payment of the interest thereon when due, and the default has continued for the space of 12 months after notice thereof has been given to the mayor, and to the comptroller, if any, it is lawful for the mortgagee or trustee, upon the request of the holders of a majority in amount of the certificates issued and outstanding under the mortgage or deed of trust, to declare the whole of the principal of all of the certificates, which are unpaid, to be at once due and payable, and to proceed to foreclose the mortgage or deed of trust in any court of competent jurisdiction. At a foreclosure sale, the mortgagee or the holders of the unpaid certificates may become the purchaser or purchasers of the property, rights and privileges sold, if he or they are the highest bidders. Any public utility acquired under any such foreclosure shall be subject to regulation by the corporate authorities of the municipality to the same extent as if the right to construct, maintain, and operate that property had been acquired through a direct grant without the intervention of foreclosure proceedings.
However, no public utility certificates shall ever be issued by any municipality under the provisions of this Division 117 unless the question of the adoption of the ordinance of the corporate authorities authorizing the issuance thereof has first been submitted to the electors of the municipality and approved by a majority of the electors of the municipality voting upon the question. The question shall be submitted in accordance with the provisions of Section 11-117-3.