Public Act 90-0520 of the 90th General Assembly
Public Act 90-0520
SB747 Enrolled LRB9001850MWpc
AN ACT concerning State finance.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 1. Short title. This Act may be cited as the
Real Estate Leasing Act.
Section 5. Applicability.
(a) All leases of real property for use of State
agencies, authorities, boards, commissions, departments,
institutions, bodies politic, and all other administrative
units or outgrowths of the executive branch of State
government except the Constitutional officers, the State
Board of Education, and the State colleges and universities
and their governing bodies shall be procured in accordance
with the provisions of this Act.
(b) Notwithstanding anything to the contrary in this
Act, the purchase of real estate in fee simple or less than
fee simple, including by lease purchase, is not subject to
this Act, but shall be purchased in accordance with law and
rules established outside this Act.
(c) For purposes of this Act, "Director" shall mean the
Director of Central Management Services.
Section 10. Leases. The Director shall have the
authority to procure leases for real property.
Section 15. Method of source selection.
(a) Request for information. Except as provided in
subsections (b) and (c) of this Section, all leases of real
property shall be awarded by a request for information
process in accordance with Section 20 of this Act.
(b) Other methods. A request for information process
need not be used and the procurement may be negotiated in the
following situations:
(1) renewal or extension of existing leases,
(2) temporary space as defined by rule,
(3) specialized space available at only one
location and parking,
(4) emergency, when there exists a threat to public
health or public safety, or when immediate expenditure is
necessary for repairs to State property in order to
protect against further loss of or damage to State
property, to prevent or minimize serious disruption in
State services, or to ensure the integrity of State
records. Emergency procurements shall be made with as
much competition as is practical under the circumstances
and shall be reported in the manner prescribed in
paragraph (3) of subsection (a) of Section 6 of the
Illinois Purchasing Act.
(c) Leases with governmental units. Leases with other
governmental units may be negotiated without using the
request for information process when deemed by the Director
to be in the best interest of the State.
Section 20. Request for information.
(a) Contents. A request for information shall be issued
and shall include:
(1) the type of property to be leased;
(2) the proposed uses of the property;
(3) the duration of the lease;
(4) the preferred location of the property; and
(5) a general description of the configuration
desired.
(b) Public notice. Public notice of the request for
information shall be published in a newspaper of general
circulation in each community where the using agency is
seeking space. The advertisement shall be published at least
14 days before the deadline for submission of responses to
the request for information. The Director may also authorize
publication in electronic form.
(c) Response. The response to the request for
information shall consist of written information sufficient
to show that the respondent can meet minimum criteria set
forth in the request. The Director may enter into
discussions with respondents for the purpose of clarifying
State needs and the information supplied by the respondents.
On the basis of the information supplied and discussions, if
any, the Director shall make a written determination
identifying the responses that meet the minimum criteria set
forth in the request for information. Negotiations shall be
entered into with all qualified respondents for the purpose
of securing a lease that is in the best interest of the
State. A written report of the negotiations shall be
retained in the lease files and shall include the reasons for
the final selection. All leases shall be reduced to writing
and filed in accordance with law.
Section 25. Other selection procedures. Nothing in this
Act shall prohibit the Director from using more restrictive
competitive selection procedures.
Section 30. Rent without occupancy. Except when deemed
by the Director to be in the best interest of the State, no
State agency may incur rental obligations before occupying
the space rented.
Section 35. Local site preferences. Upon the request of
the chief executive officer of a unit of local government,
leasing preferences may be given to sites located in
enterprise zones, tax increment districts, or redevelopment
districts when deemed to be in the best interest of the
State.
Section 40. Purchase option. For initial leases of all
space in a free-standing building, the Director shall
consider whether a purchase option exerciseable by the State
would be appropriate. The Director's determination shall be
documented in the lease file.
Section 80. The Civil Administrative Code of Illinois is
amended by changing Section 67.02 as follows:
(20 ILCS 405/67.02) (from Ch. 127, par. 63b13.2)
Sec. 67.02. (a) To lease or purchase office and storage
space, buildings, land and other facilities for all State
agencies, authorities, boards, commissions, departments,
institutions, bodies politic and all other administrative
units or outgrowths of the executive branch of State
government except the Constitutional officers, the State
Board of Education and the State colleges and universities
and their governing bodies. However, before leasing or
purchasing any office or storage space, buildings, land or
other facilities in any municipality the Department shall
survey the existing State-owned and State-leased property to
make a determination of need. Such leases shall be for a
term not to exceed 5 years, except that such leases may
contain a renewal clause subject to acceptance by the State
after that date or an option to purchase. Such purchases
shall be made through contracts which may provide for the
title to the property to transfer immediately to the State or
a trustee or nominee for the benefit of the State and which
shall: provide for the consideration to be paid in
installments to be made at stated intervals during a certain
term not to exceed 30 years from the date of the contract and
may provide for the payment of interest on the unpaid balance
at a rate that does not exceed a rate determined by adding 3
percentage points to the annual yield on United States
Treasury obligations of comparable maturity as most recently
published in the Wall Street Journal at the time such
contract is signed. Such leases and purchase contracts shall
be and shall recite that they are subject to termination and
cancellation in any year for which the General Assembly fails
to make an appropriation to pay the rent or purchase
installments payable under the terms of the lease or purchase
contract. Additionally such purchase contract shall specify
that title to the office and storage space, buildings, land
and other facilities being acquired under such a contract
shall revert to the Seller in the event of the failure of
the General Assembly to appropriate suitable funds.
However, this limitation on the term of such leases does not
apply to leases to and with the Illinois Building Authority,
as provided for in the Act enacted by the Seventy-second
General Assembly entitled the Building Authority Act, which
leases to and with said Authority may be entered into for a
term not to exceed 30 years and shall be and shall recite
that they are subject to termination and cancellation in any
year for which the General Assembly fails to make an
appropriation to pay the rent payable under the terms of such
lease. These limitations do not apply where the lease or
purchase contract contains a provision limiting the liability
for the payment of the rentals or installments thereof solely
to funds received from the Federal government.
(b) To lease from an airport authority office, aircraft
hangar and service buildings constructed upon a public
airport under the Airport Authorities Act for the use and
occupancy of the State Department of Transportation, which
lease may be entered into for a term not to exceed 30 years.
(c) To establish training programs for teaching State
leasing procedures and practices to new employees of the
Department and to keep all employees of the Department
informed about current leasing practices and developments in
the real estate industry.
(d) To enter into an agreement with a municipality or
county to construct, remodel or convert a structure for the
purposes of its serving as a correctional institution or
facility pursuant to paragraph (c) of Section 3-2-2 of the
Unified Code of Corrections.
(e) To enter into an agreement with a private
individual, trust, partnership or corporation or a
municipality or other unit of local government, when
authorized to do so by the Department of Corrections, whereby
such individual, trust, partnership or corporation or
municipality or other unit of local government will
construct, remodel or convert a structure for the purposes of
its serving as a correctional institution or facility and
then lease such structure to the Department for the use of
the Department of Corrections. A lease entered into pursuant
to the authority granted in this subsection shall be for a
term not to exceed 30 years, but may grant to the State the
option to purchase the structure outright.
Such leases shall be and shall recite that they are
subject to termination and cancellation in any year for which
the General Assembly fails to make an appropriation to pay
the rent payable under the terms of the lease.
(f) On and after September 17, 1983, the powers granted
to the Department under this Section shall be exercised
exclusively by the Department and no other State agency may
concurrently exercise any such power, unless specifically
authorized otherwise by a later enacted law. This subsection
is not intended to impair any contract existing as of
September 17, 1983.
However, no lease for more than 10,000 square feet of
space shall be executed unless the Director in consultation
with the Executive Director of the Capital Development Board
has certified that leasing is in the best interest of the
State, considering programmatic requirements, availability of
vacant State-owned space, the cost-benefits of purchasing or
constructing new space and other criteria as he shall
determine. The Director shall not permit multiple leases for
less than 10,000 square feet to be executed in order to evade
this provision.
(g) To develop and implement, in cooperation with the
Interagency Energy Conservation Committee, a system for
evaluating energy consumption in facilities leased by the
Department, and to develop energy consumption standards for
use in evaluating prospective lease sites.
(h) (1) After the effective date of this amendatory Act
of 1997, the Department shall not enter into an agreement
for the installment purchase or lease purchase of
buildings, land, or facilities unless:
(A) the using agency certifies to the
Department that the agency reasonably expects the
building, land, or facilities being considered for
purchase will meet a permanent space need;
(B) the building or facilities will be
substantially occupied by State agencies after
purchase (or after acceptance in the case of a build
to suit);
(C) the building or facilities shall be in new
or like new condition and have a remaining economic
life exceeding the term of the contract;
(D) no structural or other major building
component or system shall have a remaining economic
life of less than 10 years;
(E) the building, land or facilities:
(i) is free of any identifiable
environmental hazard, or
(ii) is subject to a management plan,
provided by the seller and acceptable to the
State, to address the known environmental
hazard;
(F) the building, land, or facilities satisfy
applicable handicap accessibility and applicable
building codes; and
(G) the State's cost to lease purchase or
installment purchase the building, land, or
facilities is less than the cost to lease space of
comparable quality, size, and location over the
lease purchase or installment purchase term.
(2) The Department shall establish the methodology
for comparing lease costs to the costs of installment or
lease purchases. The cost comparison shall take into
account all relevant cost factors including, but not
limited to, debt service, operating and maintenance
costs, insurance and risk costs, real estate taxes,
reserves for replacement and repairs, security costs, and
utilities. Such methodology shall also provide:
(A) that the comparison will be made using
level payment plans; and
(B) that a purchase price must not exceed the
fair market value of the buildings, land, or
facilities, and that such price must be
substantiated by an appraisal or by a competitive
selection process.
(3) If the Department intends to enter into an
installment purchase or lease purchase agreement for
buildings, land, or facilities under circumstances that
do not satisfy the conditions specified by this Section,
it must issue a notice to the Secretary of the Senate and
the Clerk of the House. Such notice shall contain (i)
specific details of the State's proposed purchase,
including the amounts, purposes, and financing terms;
(ii) a specific description of how the proposed purchase
varies from the procedures set forth in this Section; and
(iii) a specific justification, signed by the Director,
of why it is in the State's best interests to proceed
with the purchase. The Department may not proceed with
such an installment purchase or lease purchase agreement
if, within 60 calendar days after delivery of the notice,
the General Assembly, by joint resolution, disapproves
the transaction. Delivery may take place on a day and at
an hour when the Senate and House are not in session so
long as the offices of Secretary and Clerk are open to
receive the notice. In determining the 60 day period
within which the General Assembly must act, the day on
which delivery is made to the Senate and House shall not
be counted. If delivery of the notice to the 2 houses
occurs on different days, the 60 day period shall begin
on the day following the later delivery.
(4) On or before February 15 of each year, the
Department shall submit an annual report to the Director
of the Bureau of the Budget and the General Assembly
regarding installment purchases or lease purchases of
buildings, land, or facilities that were entered into
during the preceding calendar year. The report shall
include a summary statement of the aggregate amount of
the State's obligations under such purchases; specific
details pertaining to each purchase, the amounts,
purposes, and financing terms and payment schedule for
each purchase; and any other matter that the Department
deems advisable.
The requirement for reporting to the General
Assembly shall be satisfied by filing copies of the
report with the Auditor General, the Speaker, the
Minority Leader, and the Clerk of the House of
Representatives and the President, the Minority Leader,
and the Secretary of the Senate, the Chairs of the
Appropriations Committees, and the Legislative Research
Unit, as required by Section 3.1 of the General Assembly
Organization Act, and filing such additional copies with
the State Government Report Distribution Center for the
General Assembly as is required under paragraph (t) of
Section 7 of the State Library Act.
(Source: P.A. 87-852.)
Section 90. The State Finance Act is amended by changing
Section 9 as follows:
(30 ILCS 105/9) (from Ch. 127, par. 145)
Sec. 9. (a) No disbursements from appropriations shall
be made for rental or purchase of office or other space,
buildings or land, except in pursuance of a written lease or
purchase contract entered into by the proper State authority
and the owner or authorized agent of the property. Such lease
shall not exceed 5 years unless a greater term is authorized
by law, but such lease may contain a renewal clause subject
to acceptance by the State after that date or an option to
purchase. Such purchase contract may provide for the title to
the property to transfer immediately to the State or a
trustee or nominee for the benefit of the State and for the
consideration to be paid in installments to be made at stated
intervals during a certain term not to exceed 30 years from
the date of the contract and may provide for the payment of
interest on the unpaid balance at a rate that does not exceed
a rate determined by adding 3 percentage points to the annual
yield on United States Treasury obligations of comparable
maturity as most recently published in the Wall Street
Journal at the time such contract is signed. Such lease or
purchase contract shall be and shall recite that it is
subject to termination and cancellation in any year for which
the General Assembly fails to make an appropriation to pay
the rent or purchase installments payable under the terms of
such lease or purchase contract. Additionally such purchase
contract shall specify that title to the office and storage
space, buildings, land and other facilities being acquired
under such a contract shall revert to the Seller in the event
of the failure of the General Assembly to appropriate
suitable funds. This limitation does not apply to leases for
office or other space, buildings, or land, where such leases
or purchase contracts contain a provision limiting the
liability for the payment of the rental or installments
thereunder solely to funds received from the Federal
Government. A copy of each such lease or purchase contract
shall be filed in the office of the Secretary of State within
15 days after execution.
(b) The State, through the Bureau of the Budget for real
property and improvements and personal property related
thereto, and through the Department of Central Management
Services for personal property, may issue or cause to be
issued certificates of participation or similar instruments
representing the right to receive a proportionate share in
lease-purchase or installment purchase payments to be made by
or for the benefit of one or more State agencies for the
acquisition or improvement of real or personal property, or
refinancing of such property or payment of expenses related
to the issuance. The total principal amount of the
certificates issued or caused to be issued pursuant to this
Section for acquisition of real property shall not exceed
$125,000,000. Certificates issued or caused to be issued
pursuant to this Section shall mean certificates heretofore
or hereafter signed and delivered by the State or signed and
delivered by a trustee or fiscal agent pursuant to the
written direction of the State. Nothing in this Section
shall (i) prohibit or restrict the issuance of or affect the
validity or enforceability of certificates heretofore or
hereafter signed and delivered by any lessor or seller or an
assignee of either under a lease purchase or installment
purchase contract with the State or signed and delivered by a
trustee or fiscal agent pursuant to the written direction of
such lessor or seller or an assignee of either, or (ii)
affect the validity or enforceability of any such lease
purchase or installment purchase contract.
(1) Certificates may be issued or caused to be issued
pursuant to this Section if the Director of the Bureau of the
Budget determines that it is financially desirable and in the
best interest of the State to use certificates of
participation to finance or refinance installment purchase or
lease purchase contracts entered into by State departments,
agencies, or universities or to refund or advance refund
prior issuances of certificates of participation or similar
instruments including certificates of participation issued
under this Section and certificates of participation issued
before the effective date of this amendatory Act of 1997 the
State determines that the use of certificates of
participation is financially desirable and in the best
interest of the State. The State, through the Bureau of the
Budget for real property and improvements and personal
property related thereto, and through the Department of
Central Management Services for personal property, may enter
into arrangements for issuing, securing, and marketing
certificates of participation, including agreements, trust
indentures and other arrangements necessary or desirable to
carry out the foregoing, and any reserve funds or other
amounts securing the certificates may be held and invested as
provided in such agreements and trust indentures.
(2) Certificates of participation or similar instruments
issued or caused to be issued pursuant to this Section and
the underlying lease purchase lease-purchase or installment
purchase contracts shall not constitute or create debt of the
State as defined in the Illinois Constitution, nor a
contractual obligation in excess of the amounts appropriated
therefor, and the State shall have no continuing obligation
to appropriate money for said payments or other obligations
due under the lease purchase lease-purchase or installment
purchase contracts; provided, however, that the Governor
shall include in the annual budget request to the General
Assembly for each relevant fiscal year appropriations
sufficient to permit payment of all amounts which will be due
and payable during the fiscal year with respect to
certificates of participation issued or caused to be issued
pursuant to this Section.
(3) The maximum term of certificates of participation
issued to finance personal property shall be 10 years. The
maximum term of certificates of participation to finance the
acquisition or improvement of real property shall be 25
years. In no event, however, shall the term exceed the
expected useful life of the property being financed, with the
term calculated from the date of delivery, with respect to
personal property, and the date of occupancy, with respect to
real property.
(4) Ten days before the issuance of certificates of
participation under this Section, the Director of the Bureau
of the Budget for real property and improvements and personal
property related thereto and the Department of Central
Management Services for personal property shall transmit to
the Executive Director of the Economic and Fiscal Commission,
to the Auditor General, to the President of the Senate, the
Minority Leader of the Senate, the Speaker of the House of
Representatives, and the Minority Leader of the House of
Representatives, to the Chairs of the Appropriations
Committees, and to the Secretary of the Senate and Clerk of
the House a notice providing the following information
pertaining to the property to be financed by the
certificates:
(1) The agency and program procuring the property.
(2) A brief description of the property.
(3) The estimated cost of the property if purchased
outright.
(4) The estimated terms of the financings.
(5) The estimated total lease or installment
purchase payments for property.
(6) The estimated lease or installment purchase
payments by fiscal year for the current fiscal year and
the next 5 fiscal years.
(7) The anticipated source of funds to make lease
or installment purchase payments.
(8) Those items not anticipated to be financed upon
enactment of the budget for the fiscal year.
A copy of the Preliminary Official Statement shall also
be transmitted to the Executive Director of the Economic and
Fiscal Commission, to the Auditor General, to the President
of the Senate, the Minority Leader of the Senate, the Speaker
of the House of Representatives, the Minority Leader of the
House of Representatives, to the Chairs of the Appropriations
Committees, and to the Secretary of the Senate and Clerk of
the House at the time it is submitted for publication. After
the issuance of the certificates, a copy of the final
official statement accompanying the issuance shall be filed
with the Economic and Fiscal Commission, with the Auditor
General, with the President of the Senate, the Minority
Leader of the Senate, the Speaker of the House of
Representatives, and the Minority Leader of the House of
Representatives, with the Chairs of the Appropriations
Committees, and with the Secretary of the Senate and Clerk of
the House.
(5) The Bureau of the Budget may, based on a cost
benefit analysis, issue general obligation bonds to finance
or refinance installment purchase or lease purchase contracts
entered into by State departments, agencies, or universities
or to refund or advance refund prior issuances of
certificates of participation or similar instruments,
including certificates of participation issued under this
Section and certificates of participation issued before the
effective date of this amendatory Act of 1997.
(6) (3) The Department of Central Management Services
may promulgate rules governing its issuance and conditions of
use of certificates of participation and similar instruments.
(c) Amounts paid from appropriations for personal
service of any officer or employee of the State, either
temporary or regular, shall be considered as full payment for
all services rendered between the dates specified in the
payroll or other voucher and no additional sum shall be paid
to such officer or employee from any lump sum appropriation,
appropriation for extra help or other purpose or any
accumulated balances in specific appropriations, which
payments would constitute in fact an additional payment for
work already performed and for which remuneration had already
been made, except that wage payments made pursuant to the
application of the prevailing rate principle or based upon
the effective date of a collective bargaining agreement
between the State, or a State agency and an employee group,
or payment of funds as an adjustment to wages paid employees
or officers of the State for the purpose of correcting a
clerical or administrative error or oversight or pursuant to
a backpay order issued by an appropriate State or federal
administrative or judicial body or officer shall not be
construed as an additional payment for work already
performed.
(d) Disbursements from appropriations which are subject
to the approval or certification of the Department of Central
Management Services are subject to the following
restrictions.
Payments for personal service except for positions
specified in all appropriation Acts shall be made in
conformity with schedules and amendments thereto submitted by
the respective officers and approved by the Department of
Central Management Services before becoming effective. Such
schedules and amendments thereto may set up groups of
employment showing the approximate number to be employed,
with fixed or minimum and maximum salary rates.
This Section is subject to the provisions of Section
9.02.
(Source: P.A. 86-11; 86-657; 86-1028.)