ness of the State authority or any other person incurred for pollution control facilities undertaken prior to or after the enactment of this Act and when such State authority deems such financing to be in the public interest. Said State authority is constituted a public instrumentality and the exercise by the State authority of the powers conferred by this Act shall be deemed and held to be the performance of an essential public function. The State authority shall consist of three (3) members who shall be residents of the State and who shall be appointed by the Governor by and with the advice and consent of the Senate, a majority of the members elected concurring by record vote; provided that not more than two (2) members may be of the same political party. If the Senate is not in session when this Act takes effect, the Governor shall make temporary appointments as in the case of a vacancy. The members of the State authority first appointed by the Governor shall serve for terms expiring on June 30 in 1973, 1974 and 1975 respectively. The term of each such member is to be designated by the Governor. Upon the expiration of the term of any appointed member his successor shall be appointed by the Governor with the advice and consent of the Senate, a majority of the members elected by concurring record vote, for a term of two (2) years and until his successor has been appointed. Any member shall be eligible for reappointment. The Governor shall fill any vacancy for the remainder of any unexpired term. Any member of the State authority may be removed by the Governor for misfeasance, malfeasance or willful neglect of duty or other cause after notice at a public hearing unless such notice or hearing shall be expressly waived in writing.

$5. Quorum; mode of action; and expenses. Two (2) members of the State authority shall constitute a quorum for the purpose of conducting business and exercising its powers. Action may be taken by the State authority upon the affirmative vote of at least two (2) of its members. Each meeting of the State authority for any purpose whatsoever shall be open to the public. Notice of meetings shall be as provided in the by-laws. Resolutions need not be published or posted. Members of the State authority shall receive no compensation for services but shall be entitled to the necessary expenses including travel and lodging expenses incurred in the discharge of their duties. Any payments for compensation and expenses shall be paid from funds of the State authority.

$6. Chairman; organization meeting; executive director; surety bond.—At the initial organization meeting of the State authority the members shall adopt appropriate by-laws which shall, among other things, set forth reasonable rules governing the selection by the State authority of the pollution control facilities to be acquired and financed hereunder to the end that, subject to any other requirements of law and to consideration of the ability of the lessee or purchaser to repay bonds issued to finance pollution control facilities, special consideration shall be given to small businesses as provided in (c) of Section 2 hereof. At such initial organizational meeting and annually thereafter the State authority shall elect one (1) of its members as Chairman. It shall appoint an Executive Director, who shall not be a member of the State authority and shall serve at its pleasure. He shall receive such compensation as shall be fixed by the State authority. The Executive Director or other person designated by the State authority, shall keep a record of the proceedings thereof and shall be custodian of all books, documents and papers filed with the State authority, the minute books or journal thereof and its official seal. Said Executive Director or other person designated by the State authority, may cause copies to be made of all minutes and other records and documents of the State authority and may give certificates under the official seal of the State authority to the effect that such copies are true copies and all persons dealing with the State authority may rely on such certificates. The State authority may delegate by resolution to one or more of its members or to its Executive Director such powers and duties as it may deem proper. Each member of the State authority shall execute a surety bond in the penal sum of $50,000 and the Executive Director shall execute a surety bond in the penal sum of $100,000 or, in lieu thereof, the Chairman of the State authority shall execute a blanket bond covering each member, the Executive Director and the employees of the State authority, each surety bond to be conditioned upon the faithful performance of the duties of the office or offices covered, to be executed by a surety company authorized to transact business in this State as surety and to be approved by the Attorney General and filed in the Office of the Secretary of State. The cost of each such bond shall be paid by the State authority.

§ 7. Powers.-The State authority shall have the following powers together with all powers incidental thereto or necessary for the performance thereof: (1)

to have perpetual succession as a body politic and corporate; (2) to adopt by-laws for the regulation of its affairs and the conduct of its business; (3) to sue and be sued and to prosecute and define at law or in equity, in any court having jurisdiction of the subject matter and of the parties; (4) to have and to use a corporate seal and to alter the same at pleasure; (5) to maintain an office at such place or places as it may designate; (6) to determine the location and manner of construction of any pollution control facility to be financed under the provisions of this Act and to acquire, construct, reconstruct, repair, alter, improve, extend, own, lease, sell and otherwise dispose of the same, to enter into contracts for any and all of such purposes, to designate a person as its agent to determine the location and manner of construction of a pollution control facility undertaken by such person under the provisions of this Act and as agent of the authority to acquire, construct, reconstruct, repair, alter, improve, extend, own, lease, sell and otherwise dispose of the same and to enter into contracts for any and all of such purposes; (7) to lease or sell to a person any or all of the pollution control facilites upon such terms and conditions as the directing body shall deem proper, and to charge and collect rent or other payments therefor and to terminate any such lease or sales agreement upon the failure of the lessee to comply with any of the obligations thereof; and to include in any such lease, if desired, provisions that the lessee thereof shall have options to renew the term of the lease for such period or periods and at such rent as shall be determined by the directing body and/or to purchase any or all of the pollution control facilities for a nominal amount or otherwise or that upon payment of all of the indebtedness incurred by the authority for the financing of such pollution control facilities the authority may convey any or all of the pollution control facilities to the lessee or lessees thereof with or without consideration; (8) to issue bonds for any of its corporate purposes and to refund the same, all as provided for in this Act and subject to the provisions of Section 13 hereof; (9) generally to fix and revise from time to time and charge and collect rates, rents, fees and charges for the use of and services, furnished or to be furnished by any pollution control facility or any portion thereof and to contract with any person, firm or corporation or other body public or private in respect thereof; (10) to employ consulting engineers, architects, attorneys, accountants, construction and financial experts, superintendents, managers and such other employees and agents as may be necessary in its judgment and to fix their compensation; (11) to receive and accept from any public agency loans or grants for or in aid of the construction of any pollution control facility and any portion thereof, or for equipping the same, and to receive and accept grants, gifts or other contributions from any source; (12) to refund outstanding obligations incurred by any person to finance the cost of a pollution control facility including obligations incurred for pollution control facilities undertaken and completed prior to or after the enactment of this Act when the authority finds that such financing is in the public interest; and (13) to do all things necessary and convenient to carry out the purposes of this Act. The State authority shall not have the power to operate any pollution control facility as a business other than as a lessor. No pollution control facilities completed prior to January 1, 1970 may be financed by the State authority hereunder; provided, however, that additions and improvements to such pollution control facilities which are commenced subsequent to January 1, 1970 may be financed by the State authority. Any lease of a pollution control facility entered into pursuant to the provisions of this Act shall be for a term not shorter than the longest maturity of any bonds issued to finance such pollution control facility or a portion thereof and shall provide for rentals adequate to pay the principal of and interest and premiums, if any, on such bonds as the same fall due and to create and maintain such reserves and accounts for depreciation, if any, as the directing body shall determine to be necessary.

8. Acquisition of property.-The State authority is authorized and empowered directly or by or through any person, as its agent, to acquire by purchase, lease, gift, devise or otherwise such land, structures, rights of way, franchises, easements, other interests in lands including lands lying under water and riparian rights and any other property whether real, personal or mixed, which are located within or without the State as it may deem necessary or convenient for the construction or acquisition of a pollution control facility, but upon such terms as may be considered by the authority to be reasonable, and to take title thereto in the name of the authority or in the name of such person as its agent.

§ 9. Bonds. The bonds may be issued as serial bonds or as term bonds or a combination of both types. All bonds issued by the State authority shall be payable solely out of the revenues and receipts derived from the leasing or sale by the

authority of the pollution control facilities acquired with the proceeds thereof as may be designated in the proceedings of the directing body under which the bonds shall be authorized to be issued. Such bonds may be executed and delivered by the authority at any time and from time to time, may be in such form and denominations and of such terms and maturities, may be in fully registered form or in bearer form registrable either as to principal or interest or both, may bear such conversion privileges and be payable in such installments and at such time or times not exceeding forty (40) years from the date thereof, may be payable at such place or places whether within or without the State of Illinois, may bear interest at such rate or rates per annum without regard to any interest rate limitation appearing in any other law, may be payable at such time or times and at such place or places and evidenced in such manner, may be executed by the manual or fascimile signatures of such officers of the authority, and may contain such provisions not inconsistent herewith, all as shall be provided in the proceedings of the directing body of the authority. If deemed advisable by the directing body there may be retained in the proceedings under which any bonds of the authority are authorized to be issued an option to redeem all or any part thereof as may be specified in such proceedings, at such price or prices and after such notice or notices and on such terms and conditions as may be set forth in such proceedings, but nothing herein contained shall be construed to confer on the authority the right or option to redeem any bonds except as may be provided in the proceedings under which they shall be issued. Any bonds of the authority may be sold at public or private sale for such price and in such manner and from time to time as may be determined by the directing body of the authority, and the authority may pay all expenses, premiums and commissions which its directing body may deem necessary or advantageous in connection with the issuance thereof. Issuance by the State authority of one or more series of bonds for one or more purposes shall not preclude it from issuing other bonds in connection with the same pollution control facility or any other pollution control facility or for any other purpose hereunder, but the proceedings whereunder any subsequent bonds may be issued shall recognize and protect any prior pledge made for any prior issue of bonds. Any bonds of the State authority at any time outstanding may at any time and from time to time be refunded by the authority by the issuance of its refunding bonds in such amount as the directing body may deem necessary but not exceeding an amount sufficient to refund the principal of the bonds so to be refunded, together with any unpaid interest thereon and any premiums, commissions, service fees and other expenses necessary to be paid in connection therewith. Any such refunding may be effected whether the bonds to be refunded shall have then matured or shall thereafter mature, either by sale of the refunding bonds and the application of the proceeds thereof for the payment of the bonds to be refunded thereby, or by the exchange of the refunding bonds for the bonds to be refunded thereby with the consent of the holders of the bonds so to be refunded, and regardless of whether or not the bonds to be refunded were issued in connection with the same pollution control facility or separate pollution control facilities or for any other purpose hereunder, and regardless of whether or not the bonds proposed to be refunded shall be payable on the same date or different dates or shall be due serially or otherwise. All such bonds and the interest coupons applicable thereto, if any, are hereby made and shall be construed to be negotiable instruments.

The aggregate principal amount of bonds which may be issued under this Act by the State authority is $250,000,000. In order to carry out the purposes expressed in (c) of Section 2 hereof, $75,000,000 of such amount shall be allocated by the State authority for the issuance of bonds to finance pollution control facilities for small businesses. The State authority shall keep a record of all bonds issued by it under this Act.

§ 10. Security for bonds.-The principal of, and interest and premiums, if any, on any bonds issued by the State authority shall be secured by a pledge of the revenues and receipts out of which the same shall be made payable and may also be payable out of proceeds from the sale of the pollution control facility acquired with proceeds of such bonds. The resolution under which the bonds are authorized to be issued, and any indenture executed as security for the bonds, may contain any agreements and provisions respecting the maintenance of the properties covered thereby, the fixing and collection of rents for any portions thereof leased by the State authority to others, the creation and maintenance of special funds from such revenues and the rights and remedies available in the event of default, including the designation of a trustee, all as the directing body shall deem advisable and not in conflict with the provisions hereof. Each pledge and agreement made for

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the benefit or security of any of the bonds of the authority shall continue effective until the principal of, and interest and premiums, if any, on the bonds for the benefit of which the same were made shall have been fully paid or provision for such payment duly made. In the event of default in such payment or in any agreements of the authority made as a part of the contract under which the bonds were issued, whether contained in the proceedings authorizing the bonds or in any indenture executed as security therefor, said payment or agreement may be enforced by suit, mandamus or the appointment of a receiver in equity, or any one or more of said remedies.

§ 11. Payment of bonds.-Nonliability of State. Bonds issued under the provisions of this Act shall not be deemed to constitute a debt or liability of the State or of any political subdivision, but shall be payable solely from the funds herein provided therefor. The issuance of bonds under the provisions of this Act shall not, directly or indirectly or contingently, obligate the State or any political subdivision thereof to levy any form of taxation therefor or to make any appropriation for their payment. Nothing in this Act shall be construed to authorize the authority to create a debt of the State within the meaning of the Constitution or Statutes of Illinois and all bonds issued by the authority pursuant to the provisions of this Act are payable and shall state that they are payable solely from the funds pledged for their payment in accordance with the resolution authorizing their issuance or in any indenture executed as security therefor. The State shall not in any event be liable for the payment of the principal of or interest or premiums, if any, on any bonds of the authority or for the performance of any pledge, obligation or agreement of any kind whatsoever which may be undertaken by such authority concerned. No breach of any such pledge, obligation or agreement may impose any pecuniary liability upon the State or any charge upon its general credit or against its taxing power.

§ 12. Taxation; securities law. The State authority is hereby declared to be performing a public function in behalf of the State and to be a public instrumentality of the State. Also, for purposes of The Illinois Securities Law of 1953, compiled as Sections 137.1 through 137.17 of Chapter 121-1/2 Ill. Rev. Stats. 1969, and any amendment thereto and substitution therefor, bonds issued by any such authority shall be deemed to be securities issued by a public instrumentality or a political subdivision of the State of Illinois. To the extent permitted by the Constitution the property acquired by the State authority pursuant to this Act is exempt from taxation except that during any period that such property is leased or sold or is subject to an agreement to be leased or sold by such authority, taxes shall be payable to the same extent as if it were owned by such lessee or purchaser, or prospective lessee or purchaser, and such taxes shall be paid by such person.

§ 13. Charges and fees. All expenses of the State authority incurred in carrying out the provisions of this Act shall be payable solely from funds provided under the authority of this Act and no liability shall be incurred by any such authority beyond the extent to which monies shall have been provided under this Act, except that for the purposes of meeting the necessary expenses of initial organization and operation until such date as the authority derives monies from funds provided hereunder, the authority shall be empowered to borrow monies as may be required for such necessary expenses of organization and operation. Such borrowed monies shall be repaid within a reasonable time after the authority receives funds provided for under this Act. When any application is made to the State authority by any person for financial assistance to provide for pollution control facilities, such application shall be accompanied by an initial "service fee" in an amount determined by the State authority, but in any event not exceeding the lessor of $500 or 1/5 of 1% of the principal amount of bonds covered by such application. Such initial service fee shall be included in the project cost and shall not be refundable by the State authority whether or not any such application is approved. An additional service fee shall be paid by the applicant directly or as a part of the project cost in an amount not exceeding 1/5 of 1% of the principal amount of bonds to be issued. Such additional service fee may be paid in installments as may be satisfactory to the State authority. It is anticipated such fees shall be used for necessary expenses of the State authority.

§ 14. Conveyance of title to lessee or purchaser.-When the principal of and interest on bonds issued by the State authority to finance the cost of a particular pollution control facility, including any refunding bonds issued to refund and refinance such bonds, have been fully paid and retired or when adequate provision has been made to fully pay and retire the same, and all other conditions of the resolution and the indenture authorizing and securing the same have been satisfied,

the authority shall promptly do all things and execute such deeds and conveyances as are necessary and required to convey its right, title and interest in such pollution control facilities so financed and leased or sold to the lessee or purchaser thereof for a nominal amount or otherwise.

§ 15. Powers not restricted-law complete in itself. Neither this Act nor anything herein contained shall be construed as a restriction or limitation upon any powers which the State authority might otherwise have under any laws of this State, but shall be construed as cumulative of any such powers. No proceedings, referendum, notice or approval shall be required for the creation of the State authority or the issuance of any bonds or any instrument as security therefor, except as herein provided, any other law to the contrary notwithstanding; provided, that nothing herein shall be construed to deprive the State and its governmental subdivisions of their respective police powers over properties of the State authority, or to impair any power thereover of any official or agency of the State and its governmental subdivisions which may be otherwise provided by law. § 16. Investment of funds.-The State authority may invest any funds in bonds, notes, certificates of indebtedness, treasury bills or other securities constituting direct obligations of or obligations guaranteed by the United States of America; in certificates of deposit or time deposits constituting direct obligations of any bank as defined by the Illinois Banking Act, as heretofore and hereafter amended, provided, however, that investments may be made only in those certificates of deposit or time deposits in banks which are insured by the Federal Deposit Insurance Corporation, if then in existence; or in short term discount obligations of the Federal National Mortgage Association. Any such securities may be purchased at the offering or market price thereof at the time of such purchase. § 17. Bonds eligible for investment. The State and all counties, cities, villages, incorporated towns, and other municipal corporations, political subdivisions and public bodies, and public officers of any thereof, all banks, bankers, trust companies, savings banks and institutions, building and loan associations, savings and loan associations, investment companies, insurance companies and associations, and all executors, administrators, guardians, trustees and other fiduciaries may legally invest any sinking funds, monies or other funds belonging to them or within their control in any bonds issued pursuant to this Act.

No lessee from the State authority may purchase bonds of the State authority. § 18. Exemption from construction and bidding requirements for public buildings.— A pollution control facility is not subject to any requirements relating to public buildings, structures, grounds, works, or improvements imposed by the Illinois Revised Statutes or any other similar requirements which may be lawfully waived by this section and any requirement of competitive bidding or other restriction imposed on the procedure for award of contracts for such purpose or the lease, sale, or other disposition of property of the State authority is not applicable to any action taken under authority of this Act.

19. Powers additional to those granted by other laws—severability.—The powers conferred by this Act shall be in addition and supplementary to, and the limitations by this Act shall not affect the powers conferred by any other law. Pollution control facilities may be acquired, constructed, reconstructed, repaired, altered, improved, and extended and bonds may be issued under this Act for said purposes notwithstanding that any other law may provide for the acquisition, construction, reconstruction, repair, altering, improvement and extensions of like pollution control facilities, or the issuance of bonds for like purposes, and without regard to the requirements, restrictions, limitations or other provisions contained in any other law. If any one or more sections or provisions of this Act, or the application thereof to any person or circumstance, shall ever by held be any court of competent jurisdiction to be invalid, the remaining provisions of this Act and the application thereof to persons or circumstances other than those to which it is held to be invalid, shall not be affected thereby, it being the intention of this General Assembly to enact the remaining provisions of this Act notwithstanding such invalidity.

$20. Effective date. This Act takes effect upon its becoming a law. Passed in the General Assembly June 21, 1972.

Approved August 2, 1972.

Mr. SMITH. Thank you very much. We appreciate your coming forth with specific examples.

We have received two prepared statements and they will be inserted in the record at this time.