Legal & Legislative Notes

by Robert A. Stuart
General Counsel

GENERAL ASSEMBLY PASSES LEGISLATION AUTHORIZING ESTABLISHMENT OF WORKING CASH FUND

Although under House and Senate Rules the Spring Session of the 79th General Assembly was limited to a consideration of appropriation and emergency measures only, three Bills of major importance and directly affecting park districts were passed by the General Assembly and have been sent to the Governor for his approval.

S. B. 1930 (Glass, Don A. Moore, Nimrod, Rock, Welsh, Dougherty and Graham) Passed both Houses. If approved by the Governor, this Bill will permit the establishment of a "Working Cash Fund" by park districts through the levy of a "Working Cash Fund tax" for the years 1976, 1977, 1978 and 7979 only on all taxable property within the district at a rate not to exceed .025% of the valuation as equalized and assessed by the Department of Local Government Affairs. Such a "Working Cash Fund" may be used only for the purposes of providing monies with which to meet ordinary and necessary disbursements for salaries and other corporate purposes in order to eliminate the necessity of borrowing wherever possible. Through the issuance of anticipation tax warrants, monies transferred from the "Working Cash Fund" for such purposes must be repaid to the Fund from taxes received in the succeeding year. The collection of the tax levied for the creation of the Fund may not be anticipated by the issuance of warrants drawn against the tax.

The establishment of a Working Cash Fund under the new Sections 11.2-1, 11.2-2, 11.2-3, 11.2-4, 11.2-5 and 11.2-6 in the "Park District Code" will result in a substantial savings of interest payments which would otherwise be required in the event of the issuance of anticipation tax warrants.

The levy of the tax for the purpose of creating the Working Cash Fund is specifically made subject to a backdoor referendum. Such a referendum election must be called in the event a petition signed by not less than 5% of the voters who voted for the office of park commissioner at the last preceding general park district election is filed with the Secretary of the board within 30 days after the publication of the resolution authorizing the levy and collection of the tax. Notice of the adoption of such a resolution must be published within 10 days after its adoption in a newspaper published and having a general circulation within the park district.

S. B. 887 (Fawell) Passed by both Houses July 2. Amends Section 3-13 of "The Park District Code" by imposing limitations upon the disconnection of certain properties from a park district and annexing the same to another park district. The amendment provides that no property owner wishing to disconnect his property from an existing park district may do so unless (a) his property is contiguous with the boundary of the park district to which annexation is sought and (b) petitioner personally resides upon the parcel which he proposes to have disconnected and the said parcel which is proposed to be disconnected shall not exceed one (1) acre in area. While the provision permits any number of property owners to join in the filing of a single notice of their intent to disconnect and annex all of their respective properties under Section 3-13, said property owners may do so only if the property of every owner involved complies with the requirements set forth above.

H. B. 3918 (Geo-Karis, Reed, Griesheimer, Pierce, Hoffman, R.K., Deuster, Gaines) Passed both Houses June 28. Amends Sections 9.1-5 and 9.2-5 of The Park District Code providing that a park district may lease golf courses, tennis,

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racquetball, handball or squash courts or zoos constructed with funds from outstanding revenue bonds to other units of local government or school districts prior to the time the outstanding bonds are paid and retired and permitting such bonds to be retired from revenues collected by said other units of local government.

Regretfully House Bill 1779 which would create a "Park Districts Distribution Fund" was not released from the Rules Committee in the House. Therefore, it will become necessary to reintroduce this measure in the 1977 Session of the General Assembly if the same is to be considered, unless the possibility develops of releasing it from Committee during the Fall Session and following the general election. Such action, however, appears unlikely at this time.

Other Bills of interest to park districts passed or considered during the recent Session are as follows:

H. B. 3227 (Stubble field, Giorgi and Simms). New Act. Provides a grant to the Rockford Park District to replace the loss of real estate tax revenues resulting from the enactment of Public Act 79-703. (which provides for county assessment revision on the basis of 33-1/3% of fair market value). Tabled, House Rules Committee July 2.

H. B. 3316 (Schoeberlein, Kempiners and Hill. Authorizes the Forest Preserve District of Kane County to convey two parcels of land (10.2 acres and .50 acres) in the Oakhurst Forest Preserve District in exchange for 11.02 acres. Passed both Houses June 23.

H. B. 3318 (Hanahan, Giorgi, Choate, Shea and Hill) Amends the Minimum Wage Law to conform to minimum rates of Federal law; provides for payment of $2.20 per hour after July 1, 1976 or for those under 18 years of age $1.75 per hour. Passed both Houses June 30.*

*Note-Amendments should be closely analyzed before park district application is established.

H. B. 3629 (VonBoeckman, Luft, Schisler and Anderson) Directs Department of Conservation to convey by quit claim deed 1.488 acres in Tazewell County (commonly known as the Pekin Lake Conservation Area) to the Pekin Park District. Property to revert to the State if Pekin Park District fails to use the property for public purposes. Passes both Houses June 28.

S. B. 1525 (Hickey) New Act. Provides grant to Rockford Park District to replace loss of real estate tax revenues caused by Public Act 79-703 (same as H. B. 3327). Assigned by Rules Committee to Senate Revenue Committee May 4.

S. B. 1681 (Dougherty, Savickas, Rock and Partee) Amends the Chicago Park District Act. Increased authorized interest rate on certain bonds from 6% to 7% per annum. Authorizes Chicago Park District to issue notes and borrow money in anticipation of receipt of proceeds from the issuance of bonds and to levy a tax to pay interest on such notes. Emergency. Passed both Houses July 2.

ONE MILLION DOLLAR APPROPRIATION TO DEPARTMENT OF CONSERVATION FOR OPEN SPACE PASSES GENERAL ASSEMBLY

Tony Dean, Director of the Illinois Department of Conservation, has advised while the appropriation of $1,000,000 for the open space program was passed by the Spring Session of the General Assembly, the bonding provision necessary for the funding of that appropriation was not passed. The results of the legislative action is somewhat confusing and according to Director Dean leaves the Department with several alternatives for funding the applications which have been approved for matching grants to various park district applicants. At this time no decisions have been made according to the Director with respect to the procedure which the Department will follow in this regard. The Illinois Association of Park Districts cooperated closely with the Department in its efforts to increase the amount of the appropriation in order to fund these matching grants for open space.

ILLINOIS CONGRESSIONAL BREAKFAST HELD IN WASHINGTON, D.C. MAY 18 WELL ATTENDED

More than 40 members of the Illinois Congressional Delegation and elected park commissioners and park supervisory personnel from Illinois attended the Breakfast Meeting held in Washington on Tuesday, May 18. Those in attendance included Congressman John B. Anderson from the 16th District, Congressman Paul Findley from the 20th District, Congressman Tim Hall from the 15th District, Congressman Abner Mikva from the 10th District, staff representatives from the offices of Senators Percy and Stevenson, as well as staff representatives from the offices of Congressmen Frank Annunzio, Robert McClory, Melvin Price, Cardiss Collins, John Erienborn and Edward J. Derwinski. Tony Dean, Director of the Illinois Department of Conservation was also present. Each of the Congressional representatives present discussed the matter of Federal Revenue Sharing and the amendments proposed under the provisions of H. R. 13367. While each of the speakers expressed consideration for, and sympathy with, the fact that park districts within Illinois were not included as direct recipients of Federal Revenue Sharing, (Continued On Page 25)

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the outlook for future revisions to permit such direct sharing does not appear to be favorable. The meeting, however, opened the way for future direct discussions with our members of Congress from Illinois and the results would indicate that such meetings should be continued in the future.

Subsequent to the breakfast meeting, on June 10 the House of Representatives approved a 3 3/4 year extension of the Federal Revenue Sharing program. H. R. 13367 adopted by the House provided for the extension of Federal Revenue Sharing through September, 1980 and authorized the distribution of 24.9 billion dollars to "units of local government." The House measure eliminated the "priority expenditure categories" which included recreation. It also redefined the term "unit of local government" for eligibility purposes in that it imposes certain requirements relative to proportionate expenditures by units of general government in certain areas in order that they may qualify for direct distribution. This redefinition did not make available the direct distribution of funds to special governments such as park districts in Illinois.

The Illinois Association of Park Districts intends to submit testimony in behalf of park districts in Illinois to the Senate Committee at such time as the Federal Revenue Sharing Bill comes before it for consideration.

ATTORNEY GENERAL'S OPINION HOLDS DISTRIBUTION OF FEDERAL REVENUE SHARING FUNDS LIMITED TO AUTHORIZED PURPOSES OF UNITS OF GENERAL LOCAL GOVERNMENT

In an opinion rendered by the Attorney General under date of February 7, 1974, No. S-693, Attorney General William J. Scott has held that a township (or other unit of local government authorized to receive federal revenue sharing funds) may not expend or distribute federal revenue sharing funds for purposes other than those for which it has authority to spend its own revenue.

The question before the Attorney General's Office was that of whether Section 20 of Article XIII of "An Act to revise the law in relation to township organization" (Ill. Rev. Stats. 1971, Ch. 139) gives townships the authority to transfer funds received under the state and local Fiscal Assistance Act of 1972 ... to other units of local government, associations, individuals and corporations to perform functions defined as priority expenditure items in the Fiscal Assistance Act, but not within the statutory powers of the township to perform.

The Attorney General's opinion reads as follows:

"... I am of the opinion that it was the clear intent of the legislature under this Act to authorize townships to expend Federal Revenue sharing funds for priority items, even though townships in general do not have authority to expend their own funds for such purposes. It was not the intent of the legislature to give townships authority to expend their own funds for such purposes. It is unnecessary to answer your question as to whether the legislation was effective to accomplish this intent, for even if it were, expenditure of revenue sharing funds made under this Act would not be in compliance with Federal law.

"Section 123 of Title I of the Fiscal Assistance Act of 1972 (31 U.S.C., sec. 1243), provides in pertinent part as follows:

'(a) Assurances to the Secretary—In order to qualify for any payment under subchapter I of this chapter for any entitlement period beginning on or after January 1, 1973, a State government or unit of local government must establish (in accordance with regulations prescribed by the Secretary, and, with respect to a unit of local government, after an opportunity for review and comment by the Governor of the State in which such unit is located) to the satisfaction of the Secretary that—

* * *

(4) It will provide for the expenditure of amounts received under subchapter 1 of this chapter only in accordance with the laws and procedures applicable to the expenditure of its own revenue;

* * *

"It is my opinion that this provision permits a unit of local government to expend revenue sharing funds only for purposes for which it is authorized to expend its own funds. Since Public Act 78-207 does not give units of local government additional authority to expend their own funds, any unit of local government expending Federal revenue sharing funds for purposes for which it is not authorized to expend its own revenue, would not be in compliance with the Fiscal Assistance Act of 1972, supra. This opinion is also that of the Office of Revenue Sharing in the United States Department of the Treasury. A copy of a letter received from that office is enclosed."

Note: This opinion fully supports prior opinions rendered to park districts by the Association's General Counsel on numerous occasions in the past.

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