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Illinois Compiled Statutes

105 ILCS 5/20-2 (2026)

Indebtedness and bonds

✓ current as of May 2026
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(105 ILCS 5/20-2) (from Ch. 122, par. 20-2)
    Sec. 20-2. Indebtedness and bonds. For the purpose of creating, re-creating, or increasing a working cash fund, the school board of any such district may incur an indebtedness and issue bonds as evidence thereof in an amount or amounts not exceeding in the aggregate 85% of the taxes permitted to be levied for educational purposes for the then current year to be determined by multiplying the maximum educational tax rate or rates applicable to such school district by the last assessed valuation or assessed valuations as determined at the time of the issue of said bonds, plus 85% of the last known entitlement of such district to taxes as by law now or hereafter enacted or amended, imposed by the General Assembly of the State of Illinois to replace revenue lost by units of local government and school districts as a result of the abolition of ad valorem personal property taxes, pursuant to Article IX, Section 5, paragraph (c) of the Constitution of the State of Illinois, plus 85% of the most recent amount of funding received by the school district under Section 18-8.15. The authorized amount of bonds issued pursuant to this Section may be increased by an amount not to exceed 3% of that authorized amount to provide for expenses of issuing such bonds, including underwriter's compensation and costs of bond insurance or other credit enhancement, and also an amount to pay capitalized interest as otherwise permitted by law. The bonds shall bear interest at not more than the maximum rate authorized by law and shall mature within 20 years from the date thereof. Subject to the foregoing limitations as to amount, the bonds may be issued in an amount including existing indebtedness which will not exceed the constitutional limitation as to debt, notwithstanding any statutory debt limitation to the contrary. The school board shall before or at the time of issuing the bonds provide for the collection of a direct annual tax upon all the taxable property within the district sufficient to pay the principal thereof at maturity and to pay the interest thereon as it falls due, which tax shall be in addition to the maximum amount of all other taxes, either educational; transportation; operations and maintenance; or fire prevention and safety fund taxes, now or hereafter authorized and in addition to any limitations upon the levy of taxes as provided by Sections 17-2 through 17-9.
    With respect to instruments for the payment of money issued under this Section either before, on, or after the effective date of this amendatory Act of 1989, it is and always has been the intention of the General Assembly (i) that the Omnibus Bond Acts are and always have been supplementary grants of power to issue instruments in accordance with the Omnibus Bond Acts, regardless of any provision of this Act that may appear to be or to have been more restrictive than those Acts, (ii) that the provisions of this Section are not a limitation on the supplementary authority granted by the Omnibus Bond Acts, and (iii) that instruments issued under this Section within the supplementary authority granted by the Omnibus Bond Acts are not invalid because of any provision of this Act that may appear to be or to have been more restrictive than those Acts.
(Source: P.A. 103-591, eff. 7-1-24.)

    
Notes of Decisions
Cited in 6 cases, 2013–2017 · leading case: Lutkauskas v. Ricker, 2015 IL 117090 (Ill. 2015).
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Lutkauskas v. Ricker, 2015 IL 117090 (Ill. 2015). “105 ILCS 5/20-2, 20-3, 20-4 (West 2010). Section 20-4 specifically authorizes the school board to use money in the Working Cash Fund “for any and all school purposes.”
Lutkauskas v. Ricker, 2015 IL 117090 (Ill. 2015). “105 ILCS 5/20-2, 20-3, 20-4 (West 2010). Section 20-4 specifically authorizes the school board to use money in the Working Cash Fund “for any and all school purposes.”
Barrett v. Henry, 2013 IL App (2d) 120829 (Ill. App. Ct. 2013). “” 105 ILCS 5/20-2 (West 2002).2 ¶8 Section 20-4 of the School Code provided, in pertinent part: “Moneys derived from the issuance of bonds *** shall be used only for the purposes and in the manner hereinafter provided.”
Lutkauskas v. Ricker, 2013 IL App (1st) 121112 (Ill. App. Ct. 2013). “To fund the working cash fund, the district “may incur an indebtedness and issue bonds as evidence thereof” (105 ILCS 5/20-2 (West 2010)) or may levy taxes (105 ILCS 5/20-3 (West 2010)).”
1001 Ogden Avenue Partners v. Henry, 2017 IL App (2d) 160838 (Ill. App. Ct. 2017). “A district was able to issue bonds for the purpose of creating a working cash fund -5- (105 ILCS 5/20-2 (West 2002)), and bonds could also be issued to obtain funds for an existing working cash fund.”
1001 Ogden Avenue Partners v. Henry, 2017 IL App (2d) 160838 (Ill. App. Ct. 2017). “When the bonds here were issued, section 20-1 authorized a school district to create a working cash fund “for the purpose of enabling the district to have in its treasury at all time[s] sufficient money to meet demands thereon for ordinary and necessary expenditures for…”
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